The Property Franchise Group has given an insight into the effect of the ban on lettings fees likely to be introduced next year.
TPFG - which reported strong figures for 2017 yesterday, including a good performance by its hybrid brand EweMove - says that its intelligence suggest the government will go for an outright fees ban rather than a cap.
A statement by Richard Martin, group chairman, says that the firm is already taking action to mitigate the effects of the ban.
Then he reveals that the measure “is expected to put at risk 16 per cent of our franchisees’ lettings revenue” and at a group-wide level that represents “nine per cent of total revenue, if annualised”.
He says the work being undertaken by TPFG to mitigate this damage include “through organic means and by acquisition, accelerating the size of the tenanted managed portfolio, developing income from financial services and conveyancing referrals.”
TPFG’s management service fees increased 20 per cent in 2017 to hit £8.3m - 70 per cent of this figure is accounted for by lettings activities.
TPFG’s overall strong figures for last year - which you can see in more detail here - were helped by the firm’s so-called ‘assisted acquisitions’ programme, which aided its lettings agents operationally and financially to purchase independent competitors’ businesses.
“In the first full year of the programme we added 2,012 tenanted managed properties. I’m delighted to report that this was matched by an almost identical increase in our managed portfolio through organic growth” explains Martin.