Navigating Change & The Tenant Fee Ban
Tuesday 6th September 2017, Westminster Hall MPs gathered to debate the much discussed Tenant Fee Ban. If you have a vested interest in the Private Rented Sector, then listen to/watch the debate online - it is not riveting, yet it starts to unravel a whole range of points that until now have not been mentioned. Some of the comments made were ridiculous and if the aim was to provoke a reaction, then some of theMPs present achieved their objective. I listened to the debate 3 times, printed out the transcript and it surprises me that Kevin Hollinrake MP was the only person in the hall who could have given a detailed and accurate summary of what the role of a Letting Agent entails, yet did not. He has the "intel", with a strong background in the sector, better positioned than the Housing Minister to comment. The Letting Agent needed a "Champion" to put forward their point of view, fight their corner, clearly this was not meant to be.We now know that within 4-6 weeks a draft bill will be published which will be the platform for further consultation to take place. Since we are not in a position to "make the rules", we now required to regroup and make changes. Putting an Action Plan into place is key. There is no point in waiting legislation to be launched, since some key elements of change can be introduced and made swiftly with very little impact. Yesterday I delivered a presentation to a group of franchise owners. Entitled "The Tenant Fee Ban - The Changing Face of the Private Rented Sector", the initial reaction before I even began to speak was one of "negativity". By the end of the afternoon the unanimous response was that for the first time since the fee ban was discussed there were elements of positivity present. Each and every business owner left with a comprehensive action plan.
YOUR STRATEGY (In Brief) 1. Reducing Costs is one way of ensuring that your profits stay high. You need to look at every aspect of your business, something an owner/manager very rarely has time to do. A big concern is losing staff, so take other measures instead.THIS HAS TO BE A PRIORITY. DO IT NOW.
2. Attracting new landlords is often quite a challenge, but there are a landlords so many letting agents have not even thought of approaching. Look at alternative "landlord types". It's a blinkered way of thinking that all landlords own 1-3 buy-to-let properties- the landlord demographic is varied.
3. Maintaining and increasing fees is often the biggest challenge for any agent. Given the level of competition in the private rented sector, the likelihood is that most agents will lower their fee just to secure an instruction. This will not be the case moving forward. The tenant fees will no longer support your business. Who is going to be offering a fully managed service at 5%? Letting Agents MUST understand their WORTH.
4. Improve Operations - Streamlining operations can lead to real savings that increase profit by reducing overheads and, in some cases, reducing staff costs by saving time. Now is the time to become more efficient, slicker and effective. Embrace the 21st century.
5. Improve Staff Performance - As the line-manager or business owner, you are responsible for ensuring that your team is as effective and efficient as possible. Investing in training. Take the time to explain to your teams the change of direction and exactly why this is happening.
6. Take a good look at your marketing strategy. What is your social & digital media strategy? How do you monitor leads? Who is your target market? What does your brand represent? Are you truly the "local agent"? How do you promote the town/city you are based in?
7. Diversification - If your core business is strong, consider other business opportunities that are value added.
8. Speak to your Suppliers - What can they do for your agency? What changes are they making? What you services are they are offering your business?
9. Acquisition- Many Letting Agents not just corporates, are buying smaller agencies. We have facilitated quite a few introductions to date.
The fundamental message is that the Tenant Fee Ban WILL affect every Letting Agency in England and it will come as no surprise that those who are not ready will fall by the wayside.
Susie Crolla CEO