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We must fight to overturn ‘monstrous’ ban on tenants’ fees, says Spicerhart boss Paul Smith
Original Author: Paul Smith
As if our industry had not already been in trouble enough, the Government has blasted us with both barrels between the eyes by introducing a ban on lettings agents’ tenant fees within the Autumn Statement – even if they are now saying it might not come in until 2018.
So much for listening to the profession. Do the powers that be have their hands over their ears or are we, as an industry, failing to get our points across?
We must not back down, we must not rest on our laurels. We all need to stand up and be counted or agencies will go bust off the back of this ill-conceived announcement.
ARLA needs to come out fighting and not acquiesce quietly to this monstrous decision which will affect all our livelihoods.
I, for one, am already lobbying at the highest levels within Cabinet while members of my team sit on important task-forces such as the Fair Fees Forum.
What are you doing to fight your corner? Have you lobbied your local MP to ensure your voice is heard?
Because if we don’t, as everyone is saying, the main losers will be the tenants themselves. It is likely that the very people the Government hoped to protect will end up paying more in increased rent. The cost of administering references and inventories that tenant fees would have previously covered are now likely to be passed on to the tenant through their rent.
This decision is in real danger of driving more tenants towards rogue landlords.
We also need to understand how you distinguish between a fee and a legitimate and fair charge for a service provided. For example, what if a Tenancy Agreement needs changing because one person moves out of a shared house and another moves in? Who pays for our time to sort out the return of one deposit and setting up another? What happens if someone loses their keys and needs another set cutting or letting in late at night – who pays for that?
Isn’t it ironic that the Home Office wants letting agents to enforce the Immigration Act and yet wants to take away our ability to charge the extra cost!
The other losers are, of course, the letting agencies – some of whom are already preparing to throw in the towel. Small one-man bands may survive but the big corporates aren’t interested in running a loss-making venture. Look what happened to their share prices after the announcement!
Millions of pounds were wiped off the value of Foxtons, Countrywide, LSL and Winkworth. Foxtons was down at one stage by 16%! Will some of these businesses have to consolidate?
This decision is hardly going to help increase competition within the industry as a whole, at a time when we are contending with Brexit uncertainty, low fees, low margins, Stamp Duty changes, low entry to the industry and way too many agents chasing market share.
All of this will have an impact on customer service. I have long called for regulation and licensing in estate agency; if ever there was a time we needed it, it’s now!
We need to help legislators with their understanding of the processes and technicalities involved in moving a tenant into their new home and the paralegal role that letting agents undertake. Otherwise landlords are going to make people pay a higher price and Generation Rent are going to become firmly ensconced within the market and never be able to save the deposit to move out and on to the housing ladder.
An unintended home goal, if ever there was one, Mr Hammond.
Come on portals, do your bit for the industry!
So where are the portals in our hour of need? Helping us out by reducing fees? Or even introducing a fee holiday?
No, of course not, they are continuing to put up our fees! Just look at how much Rightmove have put up their fees, year on year, over the last 16 years since they started.
As for Zoopla’s announcement last week of £77m profit on record revenues of almost £200, just remember whose money that was – ours!
I’d like to remind the portals who created their extreme wealth. And how they use our data for their own financial means, selling information about home movers to other industries.
While the portals get ever richer, the agents are getting poorer. Many are not going to survive this coming year.
It’s time that portals gave us all a discount to see us through the rough times – before they out-price themselves.
What will the future look like from a marketing perspective? Will social media outpace the portals? Or is social media a waste of time? Will we be able to afford Google Ads?
Will local newspapers even survive, given that none of them have a national digital strategy and don’t understand how to work with estate agents to deliver leads?
If only all agents would take the leap of faith and switch to OnTheMarket, we could be in control of our own destiny.
Instead, estate agents are being held over a very big barrel – while a high proportion of property porn addicts surf the portals, bouncing off with no intention of buying, costing us a small fortune with no signs of things getting better.
Light touch, less tech
Our world has become so tech heavy that we are in danger of losing our personal touch.
Traditional estate agency was about talking to people, not emailing and texting. Your personality was able to shine through. People bought people.
Now, customers often have no idea who they are dealing with when they are buying a property, particularly if using an internet agency. They’re told they are dealing with a ‘local’ property expert – but what exactly is that? We need to come up with a definition!
Can someone who has to travel an hour away to value a property be deemed to be ‘local’? Or do people really believe when they are on the phone to someone 300 miles away they are talking to someone who knows their local area?
Let’s get out there more and show the world we mean business.
