Fees Ban ‘could keep High Street agents viable’ says PropTech chief
The tenants’ fees ban coming into effect from June 1 could help traditional lettings agents keep their place on High Streets, a leading PropTech entrepreneur says.
Neil Cobbold, chief operating officer of automated payment platform PayProp UK, says the ban could cut competition from agents currently subsidising rock-bottom management fees with revenue from charges imposed on tenants.
This will remove a major differentiator for these firms, putting all agencies on a more equal footing with regard to the total fees they charge.
Cobbold says retail sector analysis from the Local Data Company shows 211 agency branch offices closed in the first half of 2018 - but the ban could, ironically, help out.
"With many agencies expected to increase management fees as a consequence of the ban, those charging the lowest fees will have to raise their prices, reducing the gap between the top and bottom end of the market.
"With a more level playing field in terms of management fees, high street letting agents providing first-class property management will be able to thrive," adds Cobbold.
One inevitable consequence, of course, is that landlords will be on the lookout for the best service and will - he believes - increasingly be prepared to pay for quality.
"As costs rise and value for money becomes more important, a letting agency which is on top of crucial issues such as payments, rent arrears and property maintenance will become more indispensable than ever to landlords," Cobbold explains.
"As well as pursuing alternative revenue streams, the best-prepared agencies will be using PropTech to their advantage, helping them to be more efficient and offer a more streamlined and effective service to landlords.
"The landscape of the rental sector will change considerably this year, but there remains a whole host of opportunities for savvy high street letting agents to remain profitable and grow their businesses" he concludes.