The Lettings Sector is Not all Bad
Now more than ever, the spotlight is well and truly on the Private Rented Sector, every aspect of the lettings process is being scrutinised. Since the announcement by Philip Hammond in last year's Autumn Statement, the Lettings Industry appears to feature daily in national & trade press. The content of the Queen's Speech made reference to the sector, the Debate in Westminster at the beginning of September saw 12 MPs analysing the private rented sector and in particular, letting agents; Sajid Javid's speech at the Conservative Party Conference and his announcement this week, proposed regulation of Letting Agents. Never before have we witnessed such an onslaught on the Sector.
There will be those of you reading this who will insist that I am biased because we work with Letting Agents, Private Landlords, Local Authorities, Housing Associations, Corporate Landlords, but whilst everyone is entitled to an opinion , these organisations and people CHOOSE to work with us. They are NOT bound by law to invest in training; they are NOT bound by law to study for BTEC Diploma which consists of 1eighteen 1,000 word assignments & a 3 hour exam; they are NOT bound by law to seek advice; they are NOT bound by law to ensure their staff are trained.
The Letting Agents & Property Managers we work with made the decision a long time ago that they would run their businesses in a compliant, diligent and professional manner, and yet we do NOT hear a great deal about the exceptional work they do. We advise and support clients to ensure they are protected so that they can, in turn, protect their clients.
I spend my working days with lettings agents and their teams; whether I work with company owners, directors, partners, negotiators, administrators, property managers, maintenance contractors - they are truly serious about their businesses and every day we discuss the impact of the tenant fee ban and the way in which legislation will change the face of the industry forever.
What does the future hold?
- Fees charged to the landlord client are too LOW. The average day rate charged to landlords equates to £2.17. We discuss the obligations of the letting agent and how they are a conduit for their clients to ensure that landlords are compliant with approximately 300 pieces of Statute. The letting agent minimises the risk on so many levels for the landlords and goodness knows how many business owners, directors, managers stress about the possibility of falling foul of the penalties for non-compliance.
- The average small-medium sized independent will lose approximately £50,000.00 in revenue when the Tenant Fee Ban is introduced. If you have not done the calculations, then do so now. Ostrich syndrome will not help.
- There may be a bidding war among letting agents, yet I do not understand how a letting agent will continue offering 5% for a fully managed service.Some letting agents WILL disappear.
- There will be many opportunities to take over existing businesses. We are seeing not just corporates and franchise organisations going on buying sprees, but also smaller agencies.
- All services offered to tenants will have to be reassessed.
- The implications of capped security deposits and capped holding deposits will have to be considered
- Letting Agents will have to consider the value of their worth in relation to the work that they do for their landlord clients.
I have been doing what I do for 13 years. We have clients who were start ups, well-established letting agents, corporates, franchisees - we are privileged to work with people who take what they do very seriously indeed and just like me, are passionate about what they do and are great ambassadors for the Letting Industry.
They do not need to be convinced that regulation for letting agents is a positive; they understand the impact of change because they are constantly updating and re-training; they need to be congratulated on the work that they do.
Susie Crolla CEO