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0:05 AM, 26th July 2023, About 10 months ago 1
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Let-only agents are being urged to turn their landlord clients into fully managed clients after government figures show that the Renters (Reform) Bill could cost agents an astonishing £278.7m.
The call is being made by PayProp UK which points to the Renters (Reform) Bill Impact Assessment published by the Department for Levelling Up, Housing and Communities.
The firm says that the bill’s proposed changes from assured shorthold tenancies to periodic tenancies, and the removal of Section 21, will significantly reduce tenant movement.
And that fall in activity offers challenges and opportunities for letting agents.
PayProp’s managing director, Neil Cobbold, said: “Let-only agencies will rightly be concerned about potentially losing £278.7m because of the Renter’s (Reform) Bill.
“But savvy agents will have already spotted the opportunity in the proposed regulatory changes.”
He adds: “It will be key to convert 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 an agency’s bottom line.”
However, the Impact Assessment’s estimated costs, projected over a decade, primarily focus on the expenses incurred by letting agents due to reduced use by landlords.
But what remains unaccounted for, PayProp says, are the hours that agents will have to dedicate to acquainting themselves with the new measures outlined in the Bill.
The government promises that agents will be boosted with the introduction of the Property Portal because they will be empowered to register on behalf of landlords and charge for their services.
While this offers a glimmer of hope, there’s a lingering question about whether these benefits will outweigh the challenges they may face during the transitional phase.
Despite this opportunity, the assessment concludes that most costs will be borne by landlords, amounting to an estimated net cost of £10 per rented property annually.
A recent oral evidence session held by the Levelling Up, Housing and Communities Committee saw Rachel Maclean, the minister of State for Housing and Planning, admit that the government will bring in extra measures not yet accounted for in the Bill.
One such measure includes the Decent Homes Standard, which could have a profound impact on the rental sector.
While MPs will have the opportunity to scrutinise amendments, the question remains whether the government will publish a revised Impact Assessment to reflect the costs of the added measures.
Mr Cobbold said: “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.”
He added: “We also want to see the Department for Levelling Up, Housing and 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.”
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Robert
10:04 AM, 26th July 2023, About 10 months ago
As a small Landlord I struggle with the ethos of this article. If the Renters Reform Bill means that there is less tenant movement, this means there is less opportunity for fees to letting agents. The proposed solution is charge Landlords more. Less movement means less work which means maybe less letting agents, not more fees. I recently relet my property the demand was huge, the agents told me there is a huge shortage of rental property in the area, and people can't get mortgages.