Make sure your agency is prepared for another decade of legislative change
The private rented sector has undergone immense legislative change in the past decade - will this continue in the next one? We take a closer look in this extract from Goodlord's latest e-book, Dawn of a decade: Lettings in the 2020s.
Will legislation of the private rented sector slow down in the next decade? It’s unlikely. In fact, as the number of renters grows, so too does their influence on the Government, which means the lettings industry could be subject to even more new legislation in the coming decade. That’s while many letting agencies are still getting to grips with recent changes. The ban on tenant fees was the single biggest change to the lettings industry in years, overhauling long-established business models in one fell swoop. It was predicted that revenues would decrease by 30% on average for most agencies.
There are signs that they are beginning to feel the pressure, with estate agencies suffering substantial closures on the high street in 2019. But those that were well prepared for the changes continue to view the ongoing impact of the Tenant Fee Ban as an opportunity. “Potentially, there are a lot of agencies who will have to substantially increase fees, and it's an opportunity to have conversations with their landlords,” says David of College and County in Oxford.
Meanwhile, the repeal of Section 21 is on the horizon and the recommendations from the Regulation of Property Agents report will likely come to fruition in the next decade. These are likely to include mandatory licensing for agents and, like the Tenant Fee Ban, will require agencies to rethink the way they operate.
Beyond that, energy efficiency standards are likely to get tighter, while the introduction of rent controls has also emerged as a distinct possibility. The Mayor of London Sadiq Khan has called for the re-introduction of rent controls in the Capital, following in the footsteps of Berlin - where rents will be frozen for five years from 2020 - and Paris, which reintroduced rent controls in July, only two years after scrapping them.
Khan’s report called for the powers to implement a new system of rent control in London, including how existing rents could be gradually reduced and then limited within and between tenancies, as well as the powers to limit rent increases within and between tenancies whilst the proposed system is being implemented. Preparation will remain key, says ARLA Propertymark CEO David Cox. “Agencies who embrace these changes, that are planning for them, that are getting ahead of them, they are the ones that will survive in five years’ time."