There’s a potential upside to the Tenant Fee Ban, according to two of Goodlord’s agency customers who’ve decided to get a jump on the ban and stop charging fees early: a bigger, better pool of tenants to choose from, resulting in happier existing landlords - and attracting new ones.
That’s what Birmingham’s Ferndown Estates found when the agency stopped charging tenant fees just over a year ago in anticipation of the imminent Tenant Fee Ban, says director Ian Crampton.
“We felt making the jump earlier was going to attract a larger share of the current tenants who are looking for properties in the area,” says Ian. The agency soon found they were attracting more interested applicants for their properties, which in turn, has resulted in happier landlords, says Ian, because the agency is able to demonstrate that they’re choosing “the best of the best” tenants - and filling more properties, faster.
Technology such as the Goodlord platform has helped Ferndown Estates to manage the increased interest from potential tenants in their properties by improving the efficiency of the lettings process, making it easier and faster for the agency to find and place the right tenants in the right properties.
“Technology has drastically improved our pre-to-post-tenancy timeframes,” says Ian. The time saved on processing tenancies - despite the increase in volumes - has allowed Ferndown Estates to spend more time providing value to their clients and prospecting and onboarding new ones to generate more revenue. Being able to provide higher levels of service, as well as having access to a larger tenant pool, has also improved Ferndown Estate’s online reviews and led to an increase in landlord referrals.
A more efficient lettings process is going to be vital for agencies once the ban takes effect, says Ian - not only to manage an increase in lettings, but also to ensure a better overall experience for their tenants. He says tenants “will soon be able to vote with their feet” and thinks agencies will need to show they’re working for the benefit of the their tenants, as well as their landlords, because they’ll no longer be able retain tenants who might have been put off moving previously due to high fees.
Simon Buckingham, head of lettings at Wallers Estate Agents in Oxford, agrees deciding not to charge tenant fees has resulted in a better pool of applicants and, in turn, more satisfied landlords at his agency. The family-run estate and lettings agency only begun focusing on lettings in the past year as the lettings market has flourished and made the decision not to charge tenant fees from the outset.
“We haven’t charged tenants fees simply because we don’t feel it’s fair to charge tenants fees when landlords are already paying us a fee for the managing and letting of their property,” says Simon. “Not charging tenant fees gives our landlords a greater selection of tenants to choose from and it means that we’re not selecting tenants based on who can afford to pay our tenant fees.”
Simon says both their tenants and landlords have been more satisfied as a result. “Our tenants are obviously a lot happier because they’ve got more money in their pocket but also landlords are happy because they’ve got the right people for the right property and they know their tenants are happy.”
Making the decision to proactively stop charging tenant fees has boosted the reputations of both agencies - online and off - winning them a greater share of the available tenants and more landlords. Technology has made it easy for the agencies to handle the increased volumes and spend even more time growing their portfolios, says Ian. “Any lettings agent that doesn't embrace technology - particularly with the legislation as it moves forward, making margins a little bit tighter, is going to struggle.”