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Industry update - Introduction of the Tenants Fee Act

Posted on 2019-02-15

HomeLet's head of sales Vicky Quinn-Campbell looks at the latest news regarding the tenant fee ban as well as what it means for those in the industry.

Since the initial announcement back in 2017, throughout the subsequent consultation periods, the Tenants Fee Bill has loomed large over the lettings industry. It’s created an element of uncertainty for many business who have traditionally worked to their long established and successful business models. Now that we have that fixed date, I believe it represents an opportunity for high quality letting agents, who are willing to adapt, to flourish.  

It represents the opportunity to:

  • Explore and try new services and approaches
  • Optimise and improve efficiency
  • Implement new marketing strategies to drive more value to your landlords

Our twenty-five plus years of experience in the industry stands us in good stead to guide and reassure our agents regarding how best to approach a new strategy and way of operating. Whilst many of our agents feel daunted by the income gap which will be created as a result of the Tenant Fee Bill, we’re encouraging our customers to instead look ahead with confidence and from a different angle.

At HomeLet, we’ve developed what we believe to be a strong and promising answer. We’ve launched a range of products for agents, which provide the ultimate level of protection to Landlords, helping our agents win more business, and assisting in filling the income gap created by the tenant fee ban with a new, healthy revenue stream. Fittingly, we’ve called those products Evolution. 

Evolution takes the premium service we were already offering our agents and further improves on it, resulting in a definitive level of protection for landlords. We’re best placed to deliver high quality referencing and have what we believe is the ultimate Landlord proposition – helping our agents navigate through an increasingly tough and complex market place.

Finally, we’ve started the process of helping our agents work Evolution into their landlord proposition – and the response so far has been overwhelmingly positive. Feedback from agents praise the pricing scheme of Evolution, the different product options as well as the thought that Evolution has brought something new and refreshing to their business, which is helping to generate more per let.

The recent English Private Landlord Survey suggested that over 50% of landlords don’t use an agent yet, with just 14% using agent for management services. With the right approach, there’s still huge opportunity for the lettings market to grow.   

What are some of the key points:

  • The Tenants Fee Bill has been given Royal Assent and will apply to all tenancies signed after 1st June 2019
  • Security deposits will be capped at no more than five weeks’ rent
  • Holding deposits will be capped at no more than a weeks’ rent
  • A civil offence will be introduced, with a fine of £5,000 for a first offence, alongside civil penalties of up to £30,000

To read the full act in detail, click here

There remains the risk that rents could increase after the implementation of the Act, ultimately impacting tenants in a detrimental way, so it will be interesting to see what trends emerge in the HomeLet Rental Index over the course of the year. 

With just over 100 days to go, we’d love to hear from you if you’d like to learn more about how to evolve your business. Get in touch with your account manager for more information, or call us on 0330 333 7124.

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