Letting agents across the UK must prepare now for a ban on fees charged to tenants says a PropTech company - and the best way to do that is to streamline processes.
The automated rental payment provider PayProp says agents should consider alternative revenue streams, streamline financial processes and adopt business platforms that allow them to scale efficiently.
The results of a a formal consultation on a fees ban in England is likely to be made known this autumn; meanwhile a similar consultation process is now underway in Wales, while in Northern Ireland another consultation process was undertaken earlier this year.
The consequence, says PayProp, is that most letting agents risk losing a significant proportion of revenue when a ban is introduced, as it has been already in Scotland.
The Welsh Government, for example, reports that fees charged to tenants account for around 19 per cent of a typical agent's income; separately, the software provider Eurolink says a ban could cost a single office agency £85,000 annually.
“It’s clear that we could soon reach a point when upfront letting agent fees charged to tenants are banned in all corners of the UK,” says Neil Cobbold, chief operating officer of PayProp in the UK.
“That’s why it’s important that agents begin to plan now for how they are going to replace lost revenue – whether through alternative revenue streams, optimisation of business processes for better efficiencies, or through low-overhead growth.”
PayProp suggests streamlining financial processes is an indispensable way of utilising technology. “Automation can help agents to generate new revenue streams, manage cashflow and become more efficient,” adds Cobbold.
“Automating the rental payments process, for example, could free up more time for agents to explore alternative revenue streams and generate more business. It can also help to improve day-to-day cashflow and ultimately improve client retention thanks to reduced rental arrears and increased landlord satisfaction” he says.
“Agents who plan their strategy now are likely to be most successful when a ban is finally introduced” he claims.