There’s opportunity to be found in the fee ban
This article was originally written by our MD, Mike Hinch on Linked in
The ban on tenant fees is set to come into action on the 1st of June 2019. When it was announced back in the autumn of 2016 the ban was approached with mixed feelings. Agents and Landlords have to consider how they are going to approach this new landscape of the rental sector. The predicted outcomes of the ban range from rising rent prices, a decrease in the quality of rental properties and smaller scale letting agents struggling in this new environment. This is just a selection of predictions that we’ve come across from our day to day reading around the fees ban. On first impressions, it’s seen that it could have a negative impact on the market.
There’ll be growing pains, but, it’s not all doom and gloom
Despite these predictions, we feel that the ban on tenant fees can be seen as an opportunity. It’s a chance to change and develop your agency for the better. Benefiting both Landlords, Tenants and of course, your agency.
What are the opportunities of the ban on tenant fees?
Renting could become more desirable
The reduction in money tenants will have to pull together upfront before moving into a let property will make renting more accessible. When in some cases tenants are ending up in debt pulling together the cash for a deposit. The alleviation of the fees can make it achievable to potential tenants who once could not take the step to rent. The removal of tenant fees also makes moving more regularly cheaper. Therefore working professional tenants who already do this will be happy and it makes this option more available to others. Finally, with more people considering renting instead of buying, there could be a higher demand for rental properties. Thus bringing more long term tenants into the market.
Landlords could look to increase their portfolios
Landlords could have higher costs for managing their properties. So, the potential of landlords looking to increase their portfolios is likely. The return on their current properties will drop as they’ll have higher expenses if they’re paying the fees a tenant usually would. By increasing the size of their portfolio, landlords can maintain the return they are used to receiving on their current properties. This increases the number of properties letting agents already manage for their current clients. We could also see landlords looking for agents who have more experience managing larger portfolios if their current agent or property manager is not suited to there new requirements.
A change to optimise your lettings agency
Now is a fantastic opportunity to look into avenues to optimise the efficiency of your agency. With a growing proptech market bringing high-quality management tools such as Payprop, Fixflow and Goodlord. Agents are able to cut down on time and money with a lot of the manual administrative tasks they once had to complete on a regular basis. This is one of the motivators that lead us to develop our own inventory app. Implementing a portal for clients to access and manage their inventory requirements more efficiently was a key motivator.
Explore different marketing routes
Billboards, taxis, train adverts and print runs come with a high price in materials and rental of advertising space. Letting agencies can look at how they can optimise digital routes. Google ad words, youtube adverts and social media marketing which can have a far lower cost than traditional methods. With over 79% of the UK population over 18 using facebook and youtube you can gain some excellent exposure for your agency. Combined with the target-specific constraints you can place on your ads and promotions, it’s easier to get on the screens of your target audience.
Your chance to stand out of the crowd
Now is an opportune time to look at how you can improve your agency. How about looking at the extra services you could offer your landlords and tenants to generate extra revenue and increase the quality of service you offer. Create the full, all singing all dancing lettings package to attract more landlords. This can be achieved through the previous suggestion of proptech options available to you and working with professional and experienced suppliers to help grow your services. Furthermore, you can look at getting more out of social media. Here you can establish a platform to give quality information and guidance to your followers. The more value you provide to your landlords and tenants, the more desirable your agency becomes.
With change comes new opportunities, and this one is huge. Embracing the ban on tenants fees could be the next best thing to happen to the lettings industry. If looking at new suppliers to work with your agency is something you’re considering. Why not give us a call? One of our team is always happy to talk about how we can help you. Our number is 0207 989 9128 or email us at firstname.lastname@example.org to organise a call.