A rent guarantor service says it’s already chosen 25 lettings agents to take part in a trial of what it calls “a batch-based commission structure.”
The initial trial runs for 12 months; during that time the agents refer applicants to Housing Hand for processing, then invoice the company in batches.
The system allows agents to earn £25 each for the first batch of 15 tenants that use Housing Hand as the guarantor, £35 each for the next batch of 15 and £50 each for any further tenants.
Housing Hand says this “fully disclosed and transparent structure has been developed in full compliance with the Tenant Fees Act” and delivers “legislative compliance, a new source of income for letting agents and a fairer deal for private tenants.”
Housing Hand has already worked with over 3,000 accommodation providers, processing more than 70,000 applicants and covering £120m in rent.
“This has given us a deeper understanding of the issues that both tenants and lettings agents face when it comes to guaranteeing rent and managing risk. While many companies are dressing up what are essentially just insurance products as 'rent guarantee services,' we've worked to develop a completely different product - one that works more effectively for both parties” explains group managing director Jeremy Robinson.
The company says that by removing the need for tenants to pay large amounts of rent upfront, this takes away a major stumbling block from the rental process.
"The market is changing and the letting fees ban is the latest twist in the tale. We've designed our trial to support agents to deal with the post-ban lettings landscape more efficiently. We look forward to analysing the results and expanding the trial in due course” says Robinson.