You would be forgiven for thinking that Brexit was the debate that split opinion like no other. Instead, it looks like the Draft Tenants’ Fee Bill, which will see agents no longer being able to charge admin fees to tenants, has become the topic to end all debates, at least in the rental market.
Unsurprisingly, tenants are beaming from ear to ear at the thought of not having to fork out hundreds of extra pounds. Take your agent hat off for a second, and it’s hard to begrudge them of their joy. Cobbling together a deposit worth six-weeks’ rent, not to mention the actual rent for the first month in advance, is no easy task. That’s without even mentioning the admin fees.
While renters are doing a little song and dance, many lettings agents have been left feeling apprehensive about the new rules that will see fees banned. The idea of potentially losing thousands of pounds a month won’t exactly fill you with joy, which is totally understandable.
However, there’s no need to press the panic button just yet. There are many ways in which you can fuel growth in other areas, making sure that your business doesn’t suffer as a result.
You Want The Truth? You Can’t Handle The Truth (Ok, Maybe You Can)
After much furore, the banning of tenant fees looks like it’s going to happen. In November 2016, Philip Hammond, Chancellor of the Exchequer, chancelled his way into Chancel Town and announced that lettings agents will have to stop charging tenants admin fees. This became known as The Draft Tenants’ Fee Bill.
Then everything went a bit quiet (perhaps they lost the keys to Chancel Town?) until recently when it was announced that the new rules will come into play in 2019. But what exactly is changing? While the exact date is yet to be announced, as of 2019 lettings agents and landlords will no longer be able to charge for the following (take a deep breath):
- Admin charges
- Credit checks
- Charging for guarantors
- Property inventories
- Cleaning services when vacating the property
- Defleaing a property as a result of tenants having pets
- Gardening services
- Set requirements to having specific insurance companies
- Renewal and exit fees
And breathe. It’s a lot; there’s no denying that. Tenants also won’t have to pay more than one week’s rent for a holding deposit and six weeks’ rent for the actual deposit. In fact, the only things that aren’t exempt from the ban are holding deposits, rent (that’s a given), and deposits and charges if a tenant defaults on the rental contract.
Money, Money, Money, Money… MONEY!
With so many items now off the list, it’s understandable that agents are concerned about potential revenue loss. Lettings fees make up around £0.7 million of the annual £4 billion the lettings sector makes each year.
If you’re a small, independent agency, the tenant fee ban is likely to hit harder than most. While some of the biggest brands can offset the ban through the sheer amount of business they do on a monthly basis, smaller agencies could find themselves feeling the pinch.
Tenant fees are a big earner for many agencies - 15 new tenancies a month could equate to around £3,000 in tenant fees. That’s an awful lot of money to wipe off from the monthly income stream. Fortunately, the Draft Tenants’ Fee Bill doesn’t need to leave a hole in your pocket.
Day-to-Day Efficiencies of Running an Agency
There are many day-to-day elements of running an agency that can be tweaked to provide a more efficient output. Cutting costs in certain areas can help offset the potential slow down in income tenant fees would normally generate.
Start by focusing on what you currently have, eg your team members. Create a culture where employees are eager to stay in the long term by providing them with a genuine chance to progress up the ladder. The result should mean less staff turnover, which will see you save on general recruitment time and costs.
Make the job of you and your employees easier by embracing automation. Savvy estate agents can get ahead of the curve by automating certain aspects of their job, leaving more time to win landlords and find renters a home.
Automating things like referencing means less human hours spent on processes. Marketing automation apps can help with, you guessed it, marketing tasks, while setting and syncing your calendars removes any doubts about missing appointments.
Embracing technology is the best way forward for agents that want to get ahead of the curve and generate more quality leads.
If your leads came from a renter-only website like, let’s say, Movebubble 😉, you would spend less time dealing with the many unqualified leads that filter through Rightmove and Zoopla. While the other portals have their strengths in regards to the overall property market, they aren’t focused solely on letting properties.
Movebubble may also cost on a per month basis, but will save you many hours of sifting through leads and trying to find out which ones are worth contacting. Who doesn’t love a time-saver? 👩💻
Customer Service: Think About the Renter
With all that automation, you can spend more time on one of the most important aspects: customer service. A renter doesn’t directly generate revenue, but they do pay rent to your landlords. And without that rent, landlord’s have empty properties. Which means no one is happy. 😤
“The customer is always right” is a saying that has been around for a fair while. But in this day and age it’s more relevant than ever. Make sure to ask the right questions, become a renter-first brand and boost your reputation, so both renters and landlords love you.
If landlords see that you’re agent numero uno with renters, they will be more confident that you will fill their property with good-quality tenants - fast. And before you know it, they’ll be contacting you to let their rental property.
Mo Money, Less Problems
Excellent customer service, along with the help of the trusty Movebubble app, means more instructions. You’ll suddenly be saying “Draft Tenants’ Fee Bill Who?”, as you find smarter ways to manage the day-to-day runnings of your agency while racking up even more instructions.