A rent guarantor provider is aiming to generate more business for his firm by urging lettings agents to act now and transition their business models towards recurring income streams.
As the government prepares to introduce the Renters’ Rights Bill, which includes a potential ban on taking rent upfront, Bruce Evans, chief commercial officer at RentGuarantor, is trying to persuade letting agents to sign up to his firm’s service and generate extra income in the process.
Bruce Evans, who has over 25 years of experience in running lettings agencies across the UK, believes that London agents, in particular, will feel the impact most keenly.
He said: “From my personal experience of managing lettings agencies since the mid-1990s and as recently as last year, I believe the London 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 county, the more I have seen this is going to be a problem right across the UK.”
Reflecting on his time as managing director of Stirling Ackroyd in 2020, Evans explained how the lockdown period 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.”
Evans 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.”
With the Renters’ Rights Bill likely to be enforced next year, Evans advises lettings agents to begin shifting towards recurring payments sooner rather than later.
He added: “Starting now will help minimise the financial impact and ensure that agents continue to see growth once the changes are implemented.
“The landscape for landlords is shifting. Professional guarantors are the future, and with RentGuarantor’s service being free for landlords and agents, the solution is straightforward. Agents who act now to adapt will be best positioned to succeed in the competitive marketplace of tomorrow.”
No sh*t Sherlock!
He’s right but this has actually been the case for years, certainly the tenant fee ban should have been a huge catalyst for change and the forthcoming Renters Rights legislation will make even more crucial.
With the majority of sales businesses having little “value” and “lumpy” income streams, a high value managed lettings portfolio with recurring income streams from rental commissions and ancillary and associated revenues, is vital.
Many agents went into lettings initially for faster cashflow but have squandered the opportunity by working on a “let only” basis.
Working with many clients in the sector I have helped several increase income (and profit) by 60/70% without significantly increasing volumes.
It is challenging to grow organically (but can be done) which is why the “big boys” are growing by acquisition.
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