Agency to survive the Fees Ban ‘as we charge less than our rivals’

Franchise agency group Winkworth claims the lettings fee ban impact has been less severe on its agents than on other companies, because it charged tenants less to begin with.

In a trading statement to shareholders the company says that in the year to date it has seen a 32 per cent rise in lettings applicants registering versus the same period in 2018.

And it adds: “The recent tax changes in the buy to let sector have contributed to a significant reduction in the number of new landlords entering the sector and, therefore, we believe that our growth ahead of that of our peers has been driven by market share gains.”

It goes on to says that as a group it will see only limited harm to its bottom line done by the tenant fees ban introduced on June 1.

“Early indications are that as our offices' charges have been lower than our peers', and given the relatively small revenue that we derive from this source in the context of our total lettings and management revenues, we will see a limited impact and anticipate that our lettings revenues will continue to grow year on year” says the statement.  

Some 53 per cent of the group’s revenue is now derived from the lettings side, as sales revenue continues to sag in the current Brexit-fuelled market hiatus. 

Sales income fell eight per cent to £10.0m; however, lettings and management rose by 10 per cent to £11.4m.

The company also warns that with more landlords having to bear costs passed to them that would previously have gone on to tenants - combined with the ongoing impact of changes to tax relief and increased stamp duty - there will be further contraction in the buy to let sector.  

“Landlords will de-leverage in order to offset these factors and boost yields, which with increased applicants and less available stock is likely to lead to rising rents over the course of the year” the agency cautions.