Shocking figures have emerged regarding the long-running problems caused by banks demanding that agencies have a designated client account for each landlord customer.
Since 2019 many banks have contacted letting agencies, saying their undesignated client accounts would have to be closed. The agents are typically faced with replacing the accounts with individual designated ones - time-consuming and laden with red tape - or shifting their business to banks not requiring designated accounts.
The banks’ crackdown has come after the requirement that any lettings or management business handling clients’ money must be part of an approved Client Money Protection scheme in order to operate, and tightening up of Anti-Money Laundering regulations.
Now research by PropTech company Calmony has discovered the scale of the problem and the inconsistencies and costs suffered by agents.
It has canvassed the experiences of 170 agencies and found that no fewer than 72 per cent had suffered direct problems on this issue with banks, or were at the least very concerned about the prospect of the problems arising.
In addition, many banks were giving agencies only two months’ notice of undesignated account closures - and in many cases taking the opportunity to charge agencies for the opening of designated accounts.
Calmony chief executive Glynn Trott, in a video interview with Lee Dahill of Angels Media, says one agent with 101 designated accounts is facing an annual bill of up to £27,000 from its bank.
There are many more revelations about the scale of the problem in the video interview, exclusively for Letting Agent Today readers. You can see the video below.