Letting agents are being warned that they can minimise the impact of the fees ban levied on tenants by being proactive and creating new revenue streams.
PJ Darling, managing director of ITTRIA - formerly known as Hallmark Corporate Services - says: "Agents have been waiting for some time now to find out when a ban on fees will be introduced, but it seems we are no closer to being told a definitive date. Consultation ended almost four months ago now and so it seems there is no point in agents waiting around any longer for government confirmation.”
He says there are varying figures suggesting how a ban on fees could affect letting agents.
The headline figure of a study commissioned by the Welsh Government is that 19 per cent of letting agency income in Wales comes from fees charged to tenants.
The same research also found that 84 per cent of agents charged upfront fees, averaging £178 per tenancy. What's more, 76 per cent of agents taking part in the survey said they felt it likely that they would see profits fall when a ban is introduced.
The participating agents estimated that a new tenancy typically took 14 staff hours to set up, incurring average costs of £92 paid to other organisations.
"From these figures alone, we can see that the majority of letting agents will take a financial hit when a ban on fees is introduced,” PJ Darling concludes.
"Therefore, looking at alternative revenue streams and opportunities to save money now is the only way forward for agents who want to remain successful and profitable over the next few years."
ITTRIA claims its one-stop utility, broadband, referencing and insurance service for agents creates income via commissions from a variety of revenue sources; it estimates that it could add approximately £30,000 a year to the bottom line of a letting agency with 500 properties under management, while saving tenants over £60,000 a year.