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Those in the lettings sector will be well aware of the imminent ban on tenant fees but who is ready for the changes?

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 finalise preparations for the new legislation.

For some agents, the effects may not be that dramatic, but for others there may be large gaps appearing in income.

It is likely that there will be increased competition among agents, who will have to vie for business, as the stock of available properties may decrease. This will be mainly due to the removal of the allowance for wear and tear, a stagnant property market, additional stamp duty, 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 increase their revenues will be for agents to convert let only homes into fully managed 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 agents can capitalise on from landlords, including re-letting property, maintenance issues although the recently announced consultation on the abolition of Section 21 may cause further stress to the industry.

Landlords often believe that managing and letting property is simple, but there are now around 400 different items of regulation and legislation which must be adhered to when letting property.

Many landlords opt for the let only route in order to save costs. However, time spent managing their property can be expensive, and the lack of understanding of legislation and law can and has proven disastrous for some landlords.

It has been noted that tenants visiting an agent’s office seem to prefer viewing property listed under full management so for a landlord, the risk is that a tenant may choose a fully managed home over their let only property as there is an expectation that the tenancy will be handled more professionally if managed by the agent.

For the landlord, a fully managed property ensures that they are not contacted by a tenant at any time of the day, and instead, the agent is the first point of contact for all issues connected to the tenancy, making life much simpler and easier for the landlord.

To help with the management process agents should look to outsource inventory reports, property visits and check outs which will become increasingly important as they can contribute to healthy tenant / landlord relationships as the outsourced provider acts as an impartial third party when it comes to reporting maintenance issues and understanding the condition of the property.

Tenants do, in the main, react well to inventory clerks as they are seen as an external contractor with no agenda so help contribute to a more straightforward and stress free tenancy.

With the 1st June less than a month away; agents must now look to capitalise on all available opportunities in order to ‘sell’ fully managed properties over the letting only option. Agents may consider this is more work for not very much reward, however a well-managed rental property is much less of a burden, especially to a landlord, where good management practices will lead to longer tenancy terms, less void periods and happier tenants and in turn, will also lead to an increase of retained clients, which will be crucial in the upcoming and proceeding months.

Watch our webinar for a roundup of new and information and make sure you’re ready for the change.