Let’s Talk Landlords
The impending tenant fee ban has divided opinion in the industry and agents can broadly be put into three camps:
- “Fingers crossed it won’t happen” – some agents believe that Brexit and other issues will cause the ban to be kicked into the long grass.
- “Wait and see” – some agents think there’s little they can do about it and say things like, “let’s make hay while we can and worry about it when it happens.”
- “Planners” – those agents who are preparing several options including rent increases, and searching across all their services for other income streams.
My sense is there’s another option, or at least another action to take, and I’m really pleased to have heard back from several of our Summit Group Members who have chosen the advice we suggested several months ago and are now actively pursuing a different approach.
The chart from our recent survey of 5,830 Landlords shows a grim picture if your business charges high tenant fees. On the face of it, landlords have the view – “it’s not my issue, it’s something for agents and tenants to deal with” and half say they’ll shop around if agents try to increase charges. But when you speak with them and explain just what’s involved and how they currently benefit, and could in the future miss out from the effects of the ban, then their attitude changes.
Lee Pendleton, of James Pendleton Estate Agents, told me last week how they’ve spoken with over 500 landlords in the last three months specifically about the ban and for the most part found that they’re ignorant to it, either totally unaware or not anywhere close to realising the potential implications. Now, if anything, I’d expect landlords in SW London to be among the better informed and so their lack of knowledge comes as a surprise but also presents an opportunity that I imagine applies across the country.
Once landlords are caused to see the issue for what it really is, the question of who pays, (rather than whether the services provided are needed or not), then their mindset can be changed. After all, for whose benefit is having a proper contract in place, reference checks, inventories, check ins/outs, inspections, keeping compliant with legislation, etc., really for? Lee Pendleton told me that he’s been pleasantly surprised at how many landlords do change their perception of the issue once they’re made aware of all the implications and whilst there’s no “silver bullet” solution a number of options are coming to light.
The key is to talk with your landlords now. We said to our Group Members at the start of the year, “imagine the ban is in place in 12 months time, what actions will you have wished then you’d have taken now?” and the answer that came back is, “to have spoken with all the clients”. Well there’s still time to do so. I suggest someone senior in the the team speaks with each and every landlord about the ban and discuss how the issue can be addressed together. That way, if increased fees/rent or a combination are the only way forward, then at least they will feel consulted with and have had the opportunity to express their opinion.
The conversations might yield other benefits as 54% of landlords have more than one property they let out and, as is so often the case, these existing customers are probably the best source of your new business. It’s always good to talk but now it’s really the time to talk with your landlords.
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