Letting agents in England are expecting a loss in annual revenue following the ban on tenant fees, with most forecasting a fall of up to 30%, a new survey shows.
The state of the industry survey from property technology platform Goodlord found that 90% of letting agents believe there will be a financial impact on their business. This could spread to Wales when a ban comes in later this year.
Some 46% of letting agencies said that they plan to increase their managed portfolio while 29% will increase their management fees to attract additional revenue.
However, despite the potential negative impact on their revenues, the vast majority of letting agents said they had felt prepared for the new legislation, with just 2% of letting agents saying they had not felt at all prepared for the Act.
The survey also asked letting agent about plans by the Government to repeal Section 21 of the Housing Act 1988 and put an end to so called no-fault evictions. Some 85% revealed that they have served a Section 21 notice in the past 12 months.
The Government’s proposed introduction of new Section 8 grounds is likely to lead to fewer successful evictions as it is generally considered a more difficult eviction process, reflected in that only 51% of agents surveyed had served a Section 8 notice in the past 12 months.
Asked about deposit replacement schemes, some 24% of agencies said they already offered an alternative deposit scheme, and over 60% said they would consider offering one in the future.
But there is optimism for the future of the sector. Only 23% of letting agents surveyed said they weren’t optimistic about the future of the lettings industry as a whole, and 60% said they were either ‘very optimistic’ or ‘extremely optimistic’ about the future of the agency they worked for.
When asked about the factors which would significantly improve their work in the next year, agents identified speeding up the tenancy process as a key priority.
‘The optimism of letting agents despite the Tenant Fees Act 2019 and proposed repeal of Section 21 may come as a surprise to some, but the lettings industry has always been agile and able to adapt to legislative change and industry shifts,’ said Tom Mundy, chief operating officer of Goodlord.
