Those in the lettings sector will be aware of the upcoming ban on tenant fees. The Act has made its journey through parliament, and will be implemented in England from 1st June, 2019. This means that now is the time for letting agents to prepare for the new legislation.
Agents must now be forward thinking in how to run their organisations. For some agents, the effects may not be dramatic, but for others there may be large gaps in their income.
It is likely in the forthcoming months that there will be increased competition among agents, who will have to vie for business, as the stock of available properties will decrease. This will be mainly due to the removal of the allowance for wear and tear, a stagnant property market, additional stamp duty and changes to mortgage interest relief and HMRC guidelines for landlords.
If the stock of housing reduces, each instruction an agent gains will become increasingly crucial. One way to raise income will be for agents to convert let only homes into full management properties. Let only properties are good sources of consistent income, but the monthly fees will be inflated by different bills which cover the entire tenancy term.
There are many extra fee earners from landlords, including re-letting property, maintenance issues and section 21 notices. Landlords often believe that managing and letting property is simple, but there are now approximately 160 different items of regulation and legislation which must be adhered to in letting property. Inventory checking will also become increasingly important. Inventory clerk training ensures that qualified professionals will make the process of taking inventories straightforward and simple.
Many landlords opt for the let only route in order to save costs. However, time can be expensive, and ignorance of legislation and law can prove disastrous for a landlord.
A potential tenant visiting an agent’s office will also expect to see property listed under full management. For a landlord, the risk is that a tenant may choose a fully managed home over a let only property with the expectation that transactions will be handled more professionally.
For the landlord, a fully managed property ensures that they are not constantly contacted by a tenant at any time of the day, and instead, the agent is contacted for all issues connected to the tenancy, making life much simpler and easier for the landlord.
Agents must now use all sales techniques and capitalise on all opportunities in order to sell full management of property over letting only. An agent may consider this more work for not very much reward, but this is not true. A well-managed rental property is much less of a burden, especially to a landlord, where good management will lead to longer tenancy terms, less void tenancy periods and happy tenants. This will also lead to an increase of retained clients, which will be crucial in the upcoming months.
Well-managed properties will also contribute to well-maintained properties, where regular upkeep and decorating, as well as well-serviced appliances, will lead to less expensive maintenance issues. The property will be frequently visited by the agent on appointment, where maintenance issues can be reported, and the status of the current tenancy can be determined.
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