The upcoming state of the industry report from Goodlord is set to reveal that letting agents across the UK are continuing to grapple with the impact of the Tenant Fees Act six months on.
Goodlord’s report, which will be released in full on 10 February, takes the temperature of the industry on everything from legislation to revenue. Property professionals throughout the UK were surveyed for the report. Today, Goodlord reveals exclusive insights on how agents are weathering the fallout from the Tenant Fees Act.
Tenant Fees Act impact on revenues
It was widely predicted that the ban on tenant fees would have a significant impact on many agencies’ revenues. The latest Goodlord survey results show that, six months on, this is bearing out.
31% of respondents said that their agencies had lost between 10-20% of their revenue as a result of the Tenant Fees Act. 28% said their agencies had lost up to 10% of their revenue.
These figures align very closely with the market’s predictions from last summer, when 31% respondents said they expected to lose between 10-20% of their revenue, and 32% saying they expected to lose up to 10% – demonstrating the impact most agents were preparing for.
A significant slice of the market – 17% – said their agencies had lost between 21-30% of their revenue since the Act came into force, which was slightly less than the 21% who expected to lose this amount when asked six months ago. 10% of respondents said they had lost more than 30% of their revenue, higher than the 6% who foresaw that level of loss last summer.
Only 15% of survey respondents said that the Tenant Fees Act has had no impact on their revenues. This was more than the 10% of respondents who predicted that the Act wouldn’t have any impact on their revenues, as recorded in the Goodlord 2019 Summer Report, suggesting that some agents were well-prepared for the ban and have adapted their revenue model successfully.
Current and future regulations cause concern
35% of agents said they were worried about ongoing compliance with the Tenant Fees Act and the penalties for not doing so. In contrast, only 22% cited the new anti-money laundering regulations, which came into force last month, as a source of concern. This demonstrates the long-term, sustained impact the Act is having on agents and their business models.
With compliance around the Ban continuing to cause anxiety, it’s no surprise that more than half of agents surveyed (53%) said they were concerned about the potential introduction of additional legislation, such as rent controls.
Tom Mundy, COO at Goodlord said, “It’s clear that the Tenant Fees Act has had a significant impact on the industry. The majority of agents have seen revenues hit and a large slice of the market continues to worry about compliance.
“These figures show just how pivotal this legislation has been, with few emerging unaffected by the changes. With further pieces of key regulation due in 2020 and beyond, it’s essential that agents stay nimble and prepare their business models for more change to ensure they continue to prosper this decade.”