Could the Fee Ban mean a surge in rentals?
We’ve talked a lot recently about the newly formed Tenant Fee Ban which came in on the 1st June 2019 – it’s caused quite a stir in the lettings community and has likely caused independent agencies up and down the country a lot of stress. But here’s an interesting thought – despite the obvious loss in income caused by the ban, is it possible that we as agents will see a surge in rentals over the coming few months?
Have you seen a shift in the number of your rentals over the past few months? You’re not alone – statistics show that in the first quarter of 2019, many agents have noticed that there have been fewer rental enquiries compared to the same period last year. This was particularly noticeable in and around London, where house rental prices are significantly higher than many other parts of the country.
This slowdown coincides neatly with the impending date of the Tenant Fee Ban. As more renters learned about the date of the ban, it seems that a proportion of them have made the decision to hold off on applying for new tenancies until after the 1st June, in order to take full advantage of the fees ban.
From a tenant’s point of view, this is quite a savvy move – no-one can deny that the ban is good news for those who are looking to rent, as the ban promises to save them on average £400 on initial moving fees. So holding off until the ban happens makes perfect sense.
On top of this, the promise of a cap on holding deposits means that tenants looking to move are better off waiting, as those who sign rental agreements before this date are going to be paying much more upfront, and are also more likely to fork out for cleaning and damages on vacating their current property.
What we can expect now – an influx
While tenants have been waiting for the ban to take effect, research suggests that they haven’t been sitting idle – armed with the knowledge that they will save on these fees, many house-hunters will have been scouring the property sites and shortlisting their preferred properties in anticipation, and that means that they are able to pounce the minute the law changes.
It’ll be interesting to see the statistics over the coming few weeks. If the experts are right, we can expect that we’ll be getting a temporary surge in the amount of enquiries, viewings, and applications. With Summer emerging, tenants will be keen to get settled into new homes before the holiday season hits, so that they can be enjoying the time with their families without having to worry about the upheaval of moving smack bang in the middle of it all.
Don’t stop the pace
If you’re noticing a welcome increase in the amount of lets initially, don’t let it lull you into a false sense of security – this surge will be a temporary one. All of the hard work you will be putting in to make up the shortfall still needs to be at the top of your list of priorities – remember, you are still losing money on each and every let you process, regardless of the numbers. Tenant fees have made up a whopping proportion of our income, and now we’re losing out on that – if you think about it, 15 new tenancies could be losing you an average of around £3,000. Have a plan in place, and don’t become complacent. We need to continue to work hard in order to bring that income back up – and exceed it. Because competition is as fierce as it’s ever been, and it’s not likely to get any easier for us.
If you’ve ever attended one of our workshops, you’ll know what’s required for us to get ahead in this industry. Keep going!