The Tenant Fees Act is now law, which means you can no longer charge tenants any fees for granting, renewing or continuing their tenancy, unless they’ve been specifically made a permitted payment by the new legislation. But don’t make the mistake of thinking that the ban on tenant fees means that tenants will no longer be a valuable customer for your agency. You can still charge tenants for additional services, as long as the decision to take up these services is entirely up to the tenant and isn’t a condition of granting, renewing or continuing their tenancy. Sceptical? There is ample evidence that tenants will pay for services that make moving and setting up their new home easier.
Millennials, in particular, are more than willing to pay a premium for convenience. You can see this in the subscription fees they already pay for on-demand streaming services such as Spotify or Netflix; their willingness to accept the "surge" pricing Uber charges during peak periods; or by paying an additional charge for next-day delivery from ASOS.
A host of on-demand services have already emerged that relate directly to moving home, too. TaskRabbit, which lets customers hire help for small jobs around the home, is used primarily by renters to assemble flat-pack furniture, while companies such as Feather offer a furniture-subscription service that caters to those who don’t want to invest thousands of pounds in new furniture for somewhere they’ll only live for a couple of years. Letting agents, as the key facilitators of a tenant’s moving home journey, could be offering similar services to their tenants directly.
There is no reason to assume that this desire for convenience wouldn’t apply to those tenants living in a rented property on an on-going basis, either. In fact, a survey by Vaboo found that 70% of tenants would be happy to pay more rent for particular service add-ons. This included paying more for access to discounts that would help reduce their overall day-to-day spending, for example on 79.2% wanting to save money on household bills.
The survey also found almost a quarter of Londoners would pay extra for access to a communal space (24%) while Yorkshire & the Humber showed the greatest interest in gaining access to a workspace (23%) and renters in Wales would pay more for the use of a swimming pool (39%), demonstrating that making money from tenants after the Tenant Fees Act is simply a matter of identifying the services that your tenants actually want to pay for.
There are a number of services you can start offering your tenants right now - services that will make moving into their new home easier, by helping them set up their utilities, TV or broadband or by taking out insurance that will protect their contents and the property. There’s no reason why you can’t sell these services to your tenants, as long as they’re optional, and, if you’re offering services your tenants want and need, there’s no reason why they won’t buy them from you.
Oh Goodlord Limited is an Appointed Representative of Goodlord Protect Limited for general insurance products and credit broking. Goodlord Protect Limited is directly authorised by the Financial Conduct Authority, registration number 836727. You can check this information on the Financial Services Register by visiting www.fca.org.uk/register or by telephoning 0800 111 6768 (Freephone) or 0300 500 8082 from the UK. The FCA is the independent watchdog that regulates financial services.