Letting agents face an uncertain future with profits under attack, as the debate around the abolition of their fees continues. A bill, which was introduced by a Lib Dem peer with the broad support of Labour, goes through, letting agents will need to find new ways to stay profitable, and efficiency is definitely the key. The second reading of the bill was held earlier this summer, with the next step being the Committee Stage, though the date is currently to be announced.
The Renters Rights Bill is calling for a broad swathe of reforms in the rental industry, but the key concern for agents will be the push to amend the Landlord and Tenant Act of 1985. If successful, the act will ban letting agents from charging tenants or prospective tenants: registration fees; admin fees; inventory check fees; reference check fees; renewal fees; and exit fees.
The Bill, which is backed by a petition of 250,000 signatures to housing minister Brandon Lewis, also seeks to amend the new Housing and Planning Act of 2016 by compiling a register of rogue landlords and letting agents. The register, if it came into effect, would only be accessible to local authorities and the Government.
In addition to this call to arms on the fee front, letting agents are also finding themselves increasingly challenged by people trying to let properties privately, circumventing traditional estate agents by advertising directly on online residents forums and mother’s groups.
There is also a growing trend for people to avoid paying management fees to agencies by taking on the role of property manager themselves, once the property has been let. Ignoring the obvious connections and expertise of traditional agents, landlords are taking a more active role in property management, adding to the erosion of letting agents’ profitability. This death-by-a-thousand paper cuts approach is being compounded by the cascade of legislation and bureaucracy expected to accompany the Renters Rights Bill, if it is sworn into law.
So how should lettings agents deal with the challenge and stay profitable?
Increased efficiency is inevitably the answer. Streamlining your processes will free up more time in your day. Dedicating the extra time speedier functions and processes has generated to marketing and new business leads should widen your client basis, and thus your profits. But how? Many workers wish for more time in the day but have no idea how to create it.
With proptech, there are a variety of ways to save time and increase efficiency, whether it’s at the start of a tenancy or after: for instance, most of you will be managing your lettings with a lettings software, but you can also use a software to ensure Section 21 compliance at the start of a tenancy with the click of a button, or an app that lets tenants report repairs 24/7 and receive maintenance requests straight to your email. It’s just a matter of deciding which software works for you and then figuring out how to put your new free time to best use!