Opportunities in disguise for English letting agents
Goodlord's Trilly Martin shares the positive perspective of two lettings experts in Scotland and Wales after changes to their tenancy systems - and what English agents can learn.
English agents are facing a new tenancy system under the Renters (Reform) Bill, affecting everything from evictions to tenancy contract lengths. But England isn't the first nation in Great Britain to be hit with a big change in how lettings is done. Scottish and Welsh agents have been through it before.
For Scotland, it was back in 2017, with the transition to Private Residential Tenancy Agreements. For Wales, it's within the past 12 months, with a move to Occupation Contracts under the Renting Homes (Wales) Act 2016.
Both came with their fair share of challenges - yet, in a recent Goodlord webinar that I hosted, Ricky Purdy from Dawsons and Kevin Davidson-Hall with the Property Franchise Group both had positive messages to share around the opportunity that a change like this can create.
All it takes is agents investing time learning the ins and outs of the changes to come.
Showing authority to win landlords
"You've got to really know your stuff", says Kevin. "You've got to be able to sell it. You've got to rehearse these conversations, and you've got to be able to talk to landlords with complete confidence and authority."
Making sure that your agency is the most up to date on these changes is therefore a key differentiator.
"If you can do those things, you'll win more business and you'll take the bread out of your competitors' mouths," says Kevin. "That said, you don't need to rely on what's happening to competitors or to others in the wider market to decide on the direction of your own initiatives - write your own story!"
Having taken that approach, Kevin shares that the group of brands that the Property Franchise Group manages are already seeing more landlords start to use their services.
That trend is continuing in Wales too, according to statistics from our State of the Lettings Industry Survey 2023:
Persuading landlords to stay
There are other positives to take from the Scottish and Welsh experience too. After the introduction of the new tenancy system and extended notice periods in Wales, the exodus of landlords that was predicted never came to light, according to Ricky, in his agency's experience.
"We've seen fewer landlords leave the market than we'd forecast at the start of the year - and I don't see that changing at the end of this year," says Ricky.
In England, one of the biggest changes causing concern is the proposed abolition of section 21. However, in Scotland, Kevin shares that the loss of no-fault evictions in Scotland wasn't the problem that many anticipated.
"There are a limited number of circumstances in which the landlord would want to rid themself of a tenant anyway," says Kevin.
In England, those limited circumstances would be covered under the new and amended section 8 grounds - such as wanting to sell the property, or to have a close family member move in.
And, with open ended tenancies in Scotland, has there been a drop off in tenancy lengths? "The average tenancy length is now heading towards four years, so we're getting longer tenancies," says Kevin. "I can see tenancy lengths extending further."
That means that, even under a single system of periodic tenancies as proposed in England, Scotland has seen fewer void periods to fill between tenants. Those limited void periods "the primary interest" for landlords, according to Kevin.
"Having a longer-term tenant who stays - with the right to review the rent every 12 months - is actually pretty good," he says. "As long as the agent's charging structure is correct at the beginning, you'll be fine."
A shift in landlord demographics
Kevin also noted how there's no use panicking about any landlords that you do see leaving, as new ones are still entering the market too. "Always remember that the fact that landlords are leaving is only one side of the coin," he says.
He also points to the new demographic of landlords that are entering the market.
"I'm quite sure that some of the landlords coming in are different from those leaving. They might have bigger holdings, they might be incorporated."
If your agency can pivot to match the requirements of this category of landlord, this is simply another opportunity to help your business continue to be a success.