The Renters Reform Bill will cost letting agents over £275m in the next decade as fewer landlords use their services.
That’s the claim discovered in the small print of a government impact assessment on the Rental Reform Bill, now going through Parliament.
The costs, estimated over 10 years, do not take into account the time agents will have to spend familiarising themselves with the new measures contained within the Bill. However, according to the impact assessment, the government states agents will benefit from the Property Portal, as they will be able to register on behalf of landlords and charge for this service.
The Impact Assessment goes on to conclude that the main costs of the Renters (Reform) Bill will be borne by landlords and that “the estimated net cost to landlords is £10 per rented property annually”.
However, at a recent Levelling Up, Housing and Communities Committee oral evidence session, Housing Minister Rachel Macleanadmitted that the government may beef up the Bill to include other measures such as the Decent Homes Standard which will put yet more costs on landlords and agents.
“Let-only agencies will rightly be concerned about potentially losing £278.7m because of the Renter’s (Reform) Bill” says Neil Cobbold, managing director of PropTech firm PayProp UK: he has been scrutinising the measure.
“But savvy agents will have already spotted the opportunity in the proposed regulatory changes. It will be key to convert your existing let-only landlords into fully-managed clients. Charging landlords a fee for services including rent collection, maintenance and compliance with the Renters (Reform) Bill and the hundreds of other rules that govern the private rented sector, will boost your agency’s bottom line.
“However, for agents and landlords to properly assess the impact of the Renter’s (Reform) Bill on their businesses, we need more information from the government on how some of the measures will work and when they will take effect. Details on court reforms to speed up evictions, the Property Portal and the new ombudsman will be essential.
“We also want to see the Department for Levelling Up, Housing & Communities publish a revised Impact Assessment if new measures are introduced as amendments. This will allow all involved in the industry to judge the potential costs and benefits of any changes to the proposed Bill.”
