Tenancy fees ban inevitable and changes to Bill very unlikely, warns ARLA boss

The tenant fee ban will trigger “a seismic shift” in the way the lettings industry operates – and will put businesses under huge strain.

David Cox, CEO of ARLA, also warned that things are only going to get worse.

He was speaking at a webinar yesterday hosted by proptech company Goodlord.

He said: “There’s no silver bullet, because every agency runs their business differently, but I think everyone needs be looking first at how they can reduce their costs and how they can maximise their income.”

He also warned that implementation of the measure is inevitable.

He said it is unlikely that there will be any substantial changes to the Bill as it stands before it comes into effect – likely to be on April 6 next year.

He suggested that lobbying was futile with no politician opposed to the ban.

Cox said: “There’s no dissent at all. I cannot overturn the will of 650 MPs with no support in Parliament.”

Cox went on: “Landlords are starting to get a bit twitchy and some are leaving the market – and while the Government continues to attack the Private Rental Sector, it’s only going to get worse.

“We’ve been advocating strongly that they need to take a pause and look at what has worked and hasn’t worked and then fix it.”

He also said that the ban will have a negative impact on tenants: “Agents have got to reduce costs – businesses will be put under strain and pressure.”

Cox said that a new authority is being established to monitor and enforce the new legislation, which has been missing from the industry to date.

He said: “I think everybody accepts that enforcement in our industry is beyond atrocious.

“The new authority will be able to offer guidance on how to implement the law so we might have a little bit of consistency of interpretation, which we haven’t always had, and prosecute agents.”

Cox’s talk was followed by a Q&A with an industry panel, which discussed how technology could help letting agents overcome its challenges.

David Thomas, founder and director of Liberty Gate, an estate and lettings agency in Nottingham, said: “You’ve got to focus on cutting costs and increasing revenues, and that’s really where the proptech can come in and help.

“Automating processes is ultimately saving us time and money, especially on the administration side.”

Graham Lock, who started House Network in 2005 and was managing director at The Property Franchise Group before becoming an independent consultant, said the tenant fee ban is “a really good opportunity for agents to reassess their business”.

He added: “Now is the time to review all your processes and what you’re doing with technology. If you do nothing you risk not innovating as an agency.

“Agents are looking at increasing their fees, but if you’re not improving your business and your service at the same time, you’ll miss out.”

Debbie Franklin, an independent consultant who spent 27 years with Andrews Property Group, agreed: “You need to look at your processes almost as though you’re starting from scratch. It’s really key you do that properly.

“Take a step back and think how can I change that? Don’t think you can just keep doing the same thing you’ve always done – you have to keep evolving and innovating.”

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8 Comments

  1. ArthurHouse02

    Do these people really look back at what they have said. The chap from ARLA needs to resign now. Correct there is no point lobbying now, the horse has bolted, but if you had done your job properly 2-4 years ago or longer you could have got out infront of this before the MPs got beaten down by shelter.

    As for the “increase costs/save money” solution, easy to say, hard to practice, but always good to hear people whose job isnt at risk from the ban

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    1. jeremy1960

      I agree, all the trade bodies were weak and let themselves be beaten down at the beginning without any concerted effort to fight back. It was then that I and many others saw arla for what they are, an organisation in name only, working for nobody but themselves with zero interest in working for the members who have, for years, paid subscriptions believing they would have someone watching their backs only to find out when it was too late that there was nobody there!

      All

      Round

      Lazy

      A***s

       

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  2. James

    I’m afraid the political will is to replace private landlords completely with Property PLC’s and Housing Associations. The government will continue to increase taxes and tighten the straight jacket until the last private Landlord has left the sector. Sounds ridiculous, but it’s the way it is. That may work in certain cities but there is a life outside! I have no doubt it will make the current shortage of housing the tip of the iceberg over the next decade.

     

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  3. HITMAN

    A fellow agent told me this morning that he is dropping Rightmove as part of his cost cutting in relation to losses he will have from the Fee Ban!

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  4. HITMAN

    Rightmove now offering training on how agents can justify high fees, Ironic

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  5. Tcos

    Ironic, the first cost I cut was my ARLA membership.

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    1. jeremy1960

      Same here,  binned arla and felt better for not lining the pockets of self centred directors.

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  6. IWONDER36

    We are now £400 out of pocket due to paying application fees for AML!

     

    The audacity to even refer to it as an application fee, while at the same time banning agents from charging application fees!!!!

     

    The argument that tenant’s don’t require the checks, landlords do and therefore they should pay is lost by way of this very charge, agents didn’t request AML checks, HMRC or the government did, so why should we pay?

    Hypocrisy of the highest level!

     

     

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