Tenant fees ban: Almost half of agents are not ready

A survey of 4,500 lettings agents has revealed the shocking statistic that 44% are currently not ready for the tenant fees ban. Let’s hope they have plans to get up-to-speed very quickly because the ban comes into force on 1 June 2019.  With three months to go, there’s no time to lose.

We know that some agencies were counting on the legislation never getting through Parliament, but even so, they should have had a contingency plan, ready to bring into action. They could learn a lot from those agencies who have been proactive and are now well on the way to a business model that works without the income from fees. The moves made by the 56% who are prepared are sound business practices which would have been beneficial to their operations even if the ban had never made it onto the statute books.

The strategies in place

The survey reveals that 42% are focusing on efficiency as the way forward. They have been streamlining their processes, cutting waste, reducing the chance of errors in paperwork, and integrating their systems by adopting new technology. They are looking for effective partnerships, synergies and innovative ideas. Another 8% are putting more resources into the development of their teams, with training high on the agenda. When an agency has a good balance of skills and isn’t reliant on the expertise of one individual, then processes can flow more smoothly. A quarter of lettings agents are generating extra income from third parties. By choosing wisely and providing there is no conflict of interest, these initiatives can make a significant contribution to an agency’s revenue.

Those agencies which are prepared have been looking at the fees ban from a position of acceptance. Unlike a defensive position, this has allowed them to utilise the qualities they already have to the best effect. The 24% who recognise that service is their primary advantage can both capitalise on that and address areas where they could improve. The 12% who say that their staff is their biggest asset will be using that to build great relationships with all their stakeholders. They know the benefits of their knowledge and experience, things which are essential if they are to excel. Around 9% of lettings agencies are also seeing that the fees ban gives them a competitive advantage, stating that their strength is a business model that isn’t reliant on tenant fees.

Choosing a supplier?

The survey asked lots of questions including one which asked agents to state their priorities when choosing a supplier. 80% said service, a quarter focused on price and just 6% mentioned technology as a deciding factor. Although one has to wonder if those who didn’t have service as a priority understand the nature of business, that 80% is revealing and offers a lifeline for those agents who aren’t ready for the ban. Service can always be enhanced, and often by making changes that cost next to nothing to implement. Service is largely an attitude, but it’s also an ability to empathise with those to whom you’re providing a service. These are attributes that will help agents survive and thrive in the new fee-free landscape, and they should be part of every professional’s skill set.

Interestingly, the last statistic revealed by the survey may give a clue to the reason more than 4 in 10 agents are not prepared. To be ready for a change of this significance, you need to adopt a professional approach. You need to plan, investigate, innovate and develop new ways of working. You need peers, partners, inspiration, guidance and a positive mindset, but 27% of those who responded to the survey are not ARLA propertymark members. They’re already on the back foot.

Our message to agents who are in that 44% is straightforward: crack on, the clock is ticking.