PropTech could help letting agents offset losses caused by the introduction of the Tenant Fees Act, according to an expert in the sector.
The impact of the ban – which, from June 1 makes it illegal to charge for tenancy renewals and caps the security deposit at five weeks (where the annual rent is less than £50,000) among other regulations – is still largely unclear, but what is certain, according to the head of automated payment system PayProp, is that agents will need to make their processes more efficient in order to concentrate on customer service – the “cornerstone of the lettings industry”.
Chief operating officer Neil Cobbold’s comments come as research by Kent Reliance shows 30% of landlords want to reduce the amount they spend on letting agent fees, putting further strain on agents.
Despite the seemingly dismal outlook, Mr Cobbold said the future “remained bright” for agents that embraced change and concentrated on delivering great customer service.
“In order to replace lost revenue from tenant fees, agents will need to generate new income streams, make their processes more efficient and potentially increase landlord management costs where necessary,” he said.
“There is no doubt that the introduction of the Tenant Fees Act will require agents to work harder to retain existing business and secure new clients. The best agencies will already have prepared and implemented various strategies to help combat the revenue lost,” he continues.
PropTech, digital technology that many predict with transform the market over the next few years, is still in its infancy but is seen by many as a way to take admin tasks out of agents’ hands and allow them to dedicate more time to their clients. Those agents that “provide outstanding customer service”, Cobbold says, will be the ones that survive in a tough market.
Cobbold says: “The future for letting agencies remains bright as the private rental sector continues to grow and the need for professional experts rises in an increasingly complex and regulated lettings market.”