The tenant fee ban will trigger “a seismic shift” in the way the lettings industry operates – and will put businesses under huge strain.
David Cox, CEO of ARLA, also warned that things are only going to get worse.
He was speaking at a webinar yesterday hosted by proptech company Goodlord.
He said: “There’s no silver bullet, because every agency runs their business differently, but I think everyone needs be looking first at how they can reduce their costs and how they can maximise their income.”
He also warned that implementation of the measure is inevitable.
He said it is unlikely that there will be any substantial changes to the Bill as it stands before it comes into effect – likely to be on April 6 next year.
He suggested that lobbying was futile with no politician opposed to the ban.
Cox said: “There’s no dissent at all. I cannot overturn the will of 650 MPs with no support in Parliament.”
Cox went on: “Landlords are starting to get a bit twitchy and some are leaving the market – and while the Government continues to attack the Private Rental Sector, it’s only going to get worse.
“We’ve been advocating strongly that they need to take a pause and look at what has worked and hasn’t worked and then fix it.”
He also said that the ban will have a negative impact on tenants: “Agents have got to reduce costs – businesses will be put under strain and pressure.”
Cox said that a new authority is being established to monitor and enforce the new legislation, which has been missing from the industry to date.
He said: “I think everybody accepts that enforcement in our industry is beyond atrocious.
“The new authority will be able to offer guidance on how to implement the law so we might have a little bit of consistency of interpretation, which we haven’t always had, and prosecute agents.”
Cox’s talk was followed by a Q&A with an industry panel, which discussed how technology could help letting agents overcome its challenges.
David Thomas, founder and director of Liberty Gate, an estate and lettings agency in Nottingham, said: “You’ve got to focus on cutting costs and increasing revenues, and that’s really where the proptech can come in and help.
“Automating processes is ultimately saving us time and money, especially on the administration side.”
Graham Lock, who started House Network in 2005 and was managing director at The Property Franchise Group before becoming an independent consultant, said the tenant fee ban is “a really good opportunity for agents to reassess their business”.
He added: “Now is the time to review all your processes and what you’re doing with technology. If you do nothing you risk not innovating as an agency.
“Agents are looking at increasing their fees, but if you’re not improving your business and your service at the same time, you’ll miss out.”
Debbie Franklin, an independent consultant who spent 27 years with Andrews Property Group, agreed: “You need to look at your processes almost as though you’re starting from scratch. It’s really key you do that properly.
“Take a step back and think how can I change that? Don’t think you can just keep doing the same thing you’ve always done – you have to keep evolving and innovating.”