Assist Inventories, a London-based property inventory company, has surveyed letting agents across the city to find out how they are responding to the Tenant Fees Ban.
What They Said…
The Tenant Fees ban, which came into force on the 1st June 2019, has been a bone of contention in the private rental sector since plans were first announced more than two years ago. Since then, countless directives have been issued advising how agents can recoup their losses, with one option seeming most favourable; increasing landlord fees. But is that how the industry managed in the end?
In a word, yes, but not overwhelmingly.
According to the stats collected by Assist, of the respondents, 38% said that increasing landlord fees would be their preferred option for maintaining revenue following the ban, but what about the rest? The full results are as follows:
Survey question: What will your agency be doing to combat the Tenants Fee Ban?
Increasing Landlord Fees: 38%
Find cheaper alternatives for services you outsource: 15%
Market to more Landlords: 15%
Cutting staff costs or branches: 8%
Bringing in-house any service which you currently outsource: 0%
What does this tell us?
Undoubtedly, landlord fees are going up but over and above that, it is interesting to see that agents won’t be saving money through less outsourcing. This is potentially driven by ARLA’s recent statement regarding the importance of robust inventories to protect properties.
The proactive nature of the agents intending to simply market more is positive, but it is unfortunate to hear that some agents will cut branches, even staff, to ensure their survival, despite this being only a handful.
Of those who responded ‘other’, one reason included, “some costs will simply have to be absorbed”.
What this means for landlords
BTL investors will now have to think even more carefully about which agency they engage to manage their properties ensuring that, if fees are higher, service delivery is robust and highly reliable.
To understand the full results, please see the Assist website.