The BriefYourMarket.com blog

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The Tenant Fee Ban, staying legal and your revenue streams

Blog---Header-Image---Are-you-discussing-the-Tenant-Fee-Ban-with-your-landlords

Each year brings with it a new challenge for agents. Last year, that challenge was the GDPR, which saw business owners in every sector making dramatic changes. Go back a little further, and it was the rise of the online business model.

As a side note, Purplebricks recently made it into this year's Business and Consumer Superbrands list, which only helps them to further establish themselves as a household name.

Now, with less than a month to go for the Tenant Fee Ban, the feedback from our recent roadshows demonstrates signs of hesitation in the industry, as many agents are second-guessing what they need to know, do and communicate to their clients.

First of all, the ban basics.

As you may have picked up already, the ban will come into effect from the 1st June, and will only affect new tenancies. That is until June 2020 – at which point, existing tenancy agreements will also be covered.

 

Some of the banned fees will include:

- Charging for a guarantor form.

- Credit checks.

- Inventories.

- Cleaning services.


Exempt from the ban:
(Subject to additional restrictions)

- Holding deposits.

- Rent.

- Deposits.

- Charges for defaulting on the contract.

 

On average, a tenant pays £404 at the start of a new tenancy and £117 at renewal – these fees are estimated by ARLA to make up around 20% of the industry’s turnover.

Post-implementation, there will be a need for agents – and landlords – to diversify their revenue streams whilst also ensuring that they adhere to the legal requirements of the ban.

 

Lessons from Scotland

As a landlord with a portfolio in Scotland, I experienced first-hand the aftermath of the ban back in 2012.

Rather than increasing their fees, my management agent chose to approach me with a shopping list, detailing what additional services and fees I could opt for beyond a standard management package.

What caught my attention with this was that – as a landlord – I was given more control of my experience. Whilst from the agent’s perspective, it was an extremely efficient way to identify new revenue opportunities and cross-sell on them.

Some of the add-on fees could include:

- Inventory charges.

- Issuing section 21 charge.

- Void property management fee.

This was a unique approach and one that I think is probably more apt right now for English landlords, who are being squeezed by the changes to tax relief and are finding that acquiring more properties in the portfolio has become increasingly expensive.

From our Property Quarterly editorial with ResiAnalytics, it’s clear that demand from tenants is consistently steady, and yet landlord instructions have declined once more, “rounding off a year [2018] in which they have fallen in all 12 months.”

 

 

Putting fees up? Better increase your value-adding services.

It’s safe to assume that a blanket increase in your management fees won’t be especially well received by your landlords. After all, who wants to pay more for the same level of service?

In 2019, all it takes is a few clicks and your customers can find and compare dozens of brands by price, quality, efficiency, etc.

The only remaining option then is to increase your value and communicate that worth to your customers.

Under the new legislation, being a let-only landlord is a risk. The bill will be policed by local authorities for let-only landlords who are always keen to levy fines to generate income.

As such, if I were an agent, I would be pointing this out to every let-only landlord I know.

By showing your landlords that you are in it together and giving them more choice, you differentiate your agency in a saturated market.

 

Replace your lost tenancy fee income

Three regional events with three leading property experts – BriefYourMarket.com, Allstars and LegalforLandlords.

 

  

 

Rated as 4 or higher out of five by 100% of attendees, with 83% now changing their approach to the ban.

Whilst our Tenant Fee Ban event has now finished, you can book your BriefYourMarket.com consultation on 0344 800 84 24.

Legislative information | Landlord and tenants guidance | Marketing strategy


Book your consultation

 

 

Increase spend-per-head with automation

The BriefYourMarket.com blog

This is some blog description about this site

The Tenant Fee Ban, staying legal and your revenue streams

Blog---Header-Image---Are-you-discussing-the-Tenant-Fee-Ban-with-your-landlords

Each year brings with it a new challenge for agents. Last year, that challenge was the GDPR, which saw business owners in every sector making dramatic changes. Go back a little further, and it was the rise of the online business model.

As a side note, Purplebricks recently made it into this year's Business and Consumer Superbrands list, which only helps them to further establish themselves as a household name.

Now, with less than a month to go for the Tenant Fee Ban, the feedback from our recent roadshows demonstrates signs of hesitation in the industry, as many agents are second-guessing what they need to know, do and communicate to their clients.

First of all, the ban basics.

As you may have picked up already, the ban will come into effect from the 1st June, and will only affect new tenancies. That is until June 2020 – at which point, existing tenancy agreements will also be covered.

 

Some of the banned fees will include:

- Charging for a guarantor form.

- Credit checks.

- Inventories.

- Cleaning services.


Exempt from the ban:
(Subject to additional restrictions)

- Holding deposits.

- Rent.

- Deposits.

- Charges for defaulting on the contract.

 

On average, a tenant pays £404 at the start of a new tenancy and £117 at renewal – these fees are estimated by ARLA to make up around 20% of the industry’s turnover.

Post-implementation, there will be a need for agents – and landlords – to diversify their revenue streams whilst also ensuring that they adhere to the legal requirements of the ban.

 

Lessons from Scotland

As a landlord with a portfolio in Scotland, I experienced first-hand the aftermath of the ban back in 2012.

Rather than increasing their fees, my management agent chose to approach me with a shopping list, detailing what additional services and fees I could opt for beyond a standard management package.

What caught my attention with this was that – as a landlord – I was given more control of my experience. Whilst from the agent’s perspective, it was an extremely efficient way to identify new revenue opportunities and cross-sell on them.

Some of the add-on fees could include:

- Inventory charges.

- Issuing section 21 charge.

- Void property management fee.

This was a unique approach and one that I think is probably more apt right now for English landlords, who are being squeezed by the changes to tax relief and are finding that acquiring more properties in the portfolio has become increasingly expensive.

From our Property Quarterly editorial with ResiAnalytics, it’s clear that demand from tenants is consistently steady, and yet landlord instructions have declined once more, “rounding off a year [2018] in which they have fallen in all 12 months.”

 

 

Putting fees up? Better increase your value-adding services.

It’s safe to assume that a blanket increase in your management fees won’t be especially well received by your landlords. After all, who wants to pay more for the same level of service?

In 2019, all it takes is a few clicks and your customers can find and compare dozens of brands by price, quality, efficiency, etc.

The only remaining option then is to increase your value and communicate that worth to your customers.

Under the new legislation, being a let-only landlord is a risk. The bill will be policed by local authorities for let-only landlords who are always keen to levy fines to generate income.

As such, if I were an agent, I would be pointing this out to every let-only landlord I know.

By showing your landlords that you are in it together and giving them more choice, you differentiate your agency in a saturated market.

 

Replace your lost tenancy fee income

Three regional events with three leading property experts – BriefYourMarket.com, Allstars and LegalforLandlords.

 

  

 

Rated as 4 or higher out of five by 100% of attendees, with 83% now changing their approach to the ban.

Whilst our Tenant Fee Ban event has now finished, you can book your BriefYourMarket.com consultation on 0344 800 84 24.

Legislative information | Landlord and tenants guidance | Marketing strategy


Book your consultation

 

 

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