An industry figure with over 25 years of experience running lettings agencies is advising the sector to act now and transition their business models towards recurring income streams.
Bruce Evans – whose experience includes time as managing director of agency Stirling Ackroyd – now runs the RentGuarantor service and says that Labour’s Renters Rights Bill, set to become law in 2025, is likely to ban taking rent upfront.
He says: “From my personal experience of managing lettings agencies since the mid-1990s and as recently as last year, I believe the market is set to face the biggest challenges with this proposed ban on taking rent in advance. The challenge is not going to be exclusive to London, as the more I talk to agents around the country, the more I have seen this is going to be a problem right across the UK”.
Evans adds that the lockdown period earlier this decade presented an opportunity to shift from upfront payments to recurring income, providing greater financial stability for lettings agents.
“Lockdown saw central London’s income drop dramatically. Many agents, particularly in prime areas, charged landlords fees in advance, but this approach is now under threat. Educating teams to focus on recurring monthly income helped stabilise earnings, and often resulted in higher income over time. With rents continuing to rise, the benefits of this strategy have only grown.”
And he emphasises the importance of making these changes now: “Recurring income is not only more predictable but also more attractive to investors, particularly private equity and venture capital firms that dominate much of central London’s agency market and have significant investment across the UK. These investors want to see growth in income and profits, and recurring income provides the embedded value needed to deliver this.”
Ahead of the Bill – which many expect to become law in late spring or early summer 2025 – he concludes: “Starting now will help minimise the financial impact and ensure that agents continue to see growth once the changes are implemented.”
