A leading figure in the PropTech sector is urging letting agents to use the 2019 lettings fee ban as an opportunity to modernise and streamline their businesses.
Neil Cobbold, chief operating officer of the UK operations of rental payment automation provider PayProp, says given the upward pressure on fees charged to landlords, agents will need to focus on streamlining business models.
“Not only can streamlining help agents to replace lost revenue, a slicker business model which embraces technology will improve an agent’s landlord proposition. Agents should also consider automation and how it could increase their cash flow, save them time and improve their client retention rates” says Cobbold.
“The upcoming fees ban is a certainty and will represent a significant shift for the industry. But that’s not to say the best agents who embrace change can’t continue to prosper in a lettings sector which continues to grow rapidly” he adds.
However, he says the administration of the ban will present challenges and he insists that a ban which cannot be enforced would be pointless.
Cobbold - whose PayProp platform manages payments on more than 20,000 tenancies following its launch in the UK in 2015 - says recent sittings of the Select Committee on Housing, Communities and Local Government have revealed potential problems with enforcement.
A number of industry players - including the Residential Landlords Association and Trading Standards - have given evidence, and Alison Farr, lead officer at the Chartered Trading Standards Institute, said the proposed fines of £5,000 for a first offence and up to £30,000 for subsequent offences, would not cover the cost of the work required to enforce the ban.
“The comments made by Trading Standards show that full and effective enforcement of the fees ban could be a significant problem,” says Cobbold.
“A ban that is not enforced is pointless and Trading Standards needs to have confidence that it has the necessary powers and resources to properly enforce the legislation, ensuring that non-complying agents don't reoffend.”
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A letting agent I know quite well has recently trialed doing tenant fees for free to see how it would effect his business. Within 6 months he has had to let 2 staff members go and his business no longer makes a profit. The next step? Put rents up? Put fees up for landlords which will still have the effect of increasing rents?
A fee cap is surely the best option here?
I agree with Paul if there is a cap it's best all round.
If the letting industry has a fee ban then so should soliceters as they charge admin too and others too
5 weeks deposit for oversea tenants yet the court takes 4 months to get them out,,,,????
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