The large majority of letting agents in England have seen a fall in revenue since the tenant fees ban last June 1.
In a survey of more than 200 letting agents, 17% said revenue was down between 21% and 30%, while 10% reported losses of more than 30%.
Just under a third (31%) said they had lost between 10% and 20% while 28% said they had lost up to 10% of their revenue.
Only 15% said that the ban has had no impact on their revenues.
Rental platform Goodlord has compiled the figures from a survey sent out on January 8, and said that the statistics cover the seven months of the ban.
These figures align closely with what letting agents predicted in a survey that Goodlord carried out last summer, when 31% expected to lose 10%-20% of revenue, and 32% expected to lose up to 10%.
However, there was a gap between the 10% who last summer predicted that there would be no impact, and the 15% which have actually found this to be the case.
Goodlord said that this suggests that these businesses were “well-prepared and adapted their revenue model successfully”.
The Goodlord survey has also highlighted agents’ ongoing concerns, including policing of the ban, with 35% worried about compliance and the penalties.
Just over half the agents (53%) expressed concern about the possible introduction of further legislation, such as rent controls.
Tom Mundy, chief operating officer at Goodlord, said: ““It’s clear that the Tenant Fees Act has had a significant impact on the industry.
“These figures show just how pivotal this legislation has been, with few emerging unaffected by the changes.
“With further pieces of key regulation due in 2020 and beyond, it’s essential that agents stay nimble and prepare their business models for more change to ensure they continue to prosper this decade.”
Comments (8)
The sky is also blue
Those agents who say they are now trading better than before are, I suspect, being economical with the truth. Cash flow has been hit HARD – agents don’t get paid until move in with less revenue than before. Yes, it’s another pipeline to build, but to believe it hasn’t impacted the industry significantly does a disservice to those business’s that are struggling. The Government knew this would happen – they want some of us to disappear. The Good Lord said so..
I struggle with this story. Are they saying these agents business model was taking advantage of tenants by that much!
Goodlord failed to help 8 out of 10 of their customers since tenant fee ban*
Too many agents failed to plan and, in a changing wind, adjust their sales.
Many of my clients did plan and are actually now doing better than they were before the ban but it has taken a thorough and systematic approach to services provided, cost control, fee levels etc to achieve.
With the transitional period ending mid 2020 there is likely to be a “second wave” of realisation that fees etc are under threat
As with all “threats” there are opportunities too. Doing nothing was ad is an option for decline.
Fee ban pivotal wait till s21 is abolished and landlords realise the impact – that will be pivotal!
Will2 is correct.
The “good parts” of a new s8 regime promised in the “consultation” (which seems as usual to have been wholly ignored) left out the bits that would give possession where tenants are persistently late with rent or who do not allow access for repairs so the property suffers.
Agents are already cutting back on vital training with the nett result that they will cease to be compliant.
I suppose this will benefit tenants?????????
Dave Absalom
The problem will be that less than professional landlords will revert back to the days of Rachman out of desperation.