Landlords can combat fees ban costs by exploring alternatives
Following the recent announcement that the Tenants’ Fees Bill has started its formal journey through Parliament, a PropTech startup is advising landlords to think seriously about how it could affect their profits.
RentalStep says that landlords will need to consider their monthly outgoings and start shopping around for products that could save them money.
The Government’s impact assessment of the fees ban estimates that the collective cost to landlords in the policy’s first year of operation could be £82.9 million. It says that the caps on security and holding deposits, which will be introduced at the same time, could cost landlords a further £1.3 million a year.
It’s widely expected that the additional cost to landlords will come in the form of higher management fees from letting agents looking to replace lost income. The impact assessment estimates that the cost to letting agents in the first year of the ban will be upwards of £157 million.
‘It’s time for landlords to evaluate their options to ensure the new law doesn’t have a negative impact on their property business,’ said Mike Georgeson, founder and chief executive of RentalStep.
‘It’s clear from the Government’s figures that the post-fees ban landscape is likely to be an expensive one for landlords at a time when the cost of letting a property has never been higher.
‘That’s why landlords need to shop around and explore alternative options to make sure they are getting value for money when it comes to necessary services such as tenant referencing and property advertising,’ he explained.
The PropTech entrepreneur believes that technology and innovation will also have an important part to play in keeping landlords’ costs down. ‘Products that utilise technology effectively can provide more efficient and time saving processes at a lower cost than many traditional options,’ Georgeson said.
RentalStep aims to save landlords money by allowing them to list available properties on Rightmove, Zoopla and PrimeLocation for a fraction of the normal cost. The platform also gives landlords access to fully referenced tenants who have been credit checked by Experian.
The start-up, which has received Government funding as a winner of the Rent Recognition Challenge, recently reported landlord user growth of 150%. Since January, the number of landlords using the website has increased from 20 to over 400.
There are currently around 1,000 tenants using RentalStep and it’s estimated that this number will reach 5,000 by the end of the year.
‘The rental market is changing at a rapid pace and if landlords want to remain successful, they need to find solutions that can help them to keep their properties occupied for a lower cost,’ Georgeson concluded.
Rental Step – www.rentalsteop.co