The first ‘state of the industry’ report on the lettings agency sector since the introduction of the fees ban suggests individual agents are gearing up to suffer 30 per cent drops in income.
The assessment, by PropTech firm Goodlord, reveals that over 90 per cent of agencies are predicting a loss in annual revenue following the Tenant Fees Act, which came into effect on June 1.
Most of the agencies surveyed estimated losses of up to 30 per cent.
The vast majority of agencies told Goodlord they would concentrate on increasing their managed portfolio or increasing their management fees when looking to attract additional revenue.
Despite the negative impact on their revenues, the vast majority of letting agents said they had felt prepared for the new legislation, with just two per cent saying they had not felt at all prepared for the Act.
Another legislative change investigated in the survey was the proposed plan to repeal Section 21 of the Housing Act 1988 and put an end to ‘no-fault evictions’.
Some 85 per cent of lettings agencies surveyed had served a Section 21 notice in the past 12 months.
However, industry criticism of the government’s pledge to bring in new Section 8 grounds for eviction is reflected in the fact that only 51 per cent of agents surveyed had served a Section 8 notice in the past 12 months.
Goodlord also surveyed letting agencies on the hot topic of deposit replacement schemes.
Only 24 per cent of agencies said they already offered an alternative deposit scheme, but over 60 per cent said they would consider offering one in the future.
Despite the flurry of regulation and tax changes aimed at the lettings sector, the majority of agencies remained upbeat.
Only 23 per cent of agents surveyed said they weren’t optimistic about the future of the lettings industry as a whole and 60 per cent said they were either ‘very optimistic’ or ‘extremely optimistic’ about the future of the agency they worked for.
You can see the report here - although you will have to register.