A leading PropTech entrepreneur says agents who accept that the lettings fee ban is coming and who plan positively for its introduction are most likely to thrive when the market becomes more challenging.
That’s the view of Neil Cobbold, chief operating officer of PayProp UK, who has welcomed recent signs that the government recognises that enforcement is a key element of winning respect for the fees ban.
According to the draft Tenant Fees Bill currently moving through the House of Lords, Trading Standards will be responsible for enforcing the ban, while local authorities will be able to retain money raised through fines for non-compliance - but Cobbold warns that with thousands of agents across the country, policing will be difficult.
He suggests recent enforcement difficulties demonstrate the dilemma.
For example, according to 2017 research by the National Approved Letting Scheme some 93 per cent of local councils failed to issue any financial penalty for non-compliance with compulsory fee disclosure rules.
Almost two thirds of councils surveyed at the time admitted they did not consider displaying letting agent fees a high priority. What's more, a third of councils said they hadn’t allocated staffing resources to this work in 2016/17.
At the same time, 64 per cent of councils said they were yet to assess the impact the fees ban could have on enforcement.
Cobbold welcomes the Draft Tenants’ Fees Bill provision for a new lead enforcement authority to be established for the lettings sector, and is pleased at the recent doubling of funding for the National Trading Standards Estate Agency Team to £500,000 a year.
He says these are signs that more resources could be channelled into lettings enforcement once the ban becomes law - currently anticipated, although not confirmed, for April next year.
“Companies that take a positive approach to the fees ban and look to benefit from a more efficient business model are likely to thrive in the years to come" Cobbold concludes.