It was recently announced that the Tenant Fees Bill has now been introduced into Parliament. Following this development, RentalStep, a proptech startup, is suggesting to landlords how important this could be in relation to their profits.
RentalStep has stated that landlords should consider their monthly outgoings and remember to compare products in order to save money.
The Government released an impact assessment for the fees ban, which estimated an overall cost to landlords of £82.9m during the first year of it being in effect. The assessment states that the caps on security and holding deposits, to be introduced at the same time, could cost landlords a further £1.3m per year.
These additional costs to landlords are expected by many to be the result of higher management fees from letting agents, in an attempt to replace lost income. An estimate of £157m upwards has been made for the cost to letting agents during the first year of the ban.
Mike Georgeson, the Founder and Chief Executive of RentalStep, has commented: “It’s time for landlords to evaluate their options to ensure the new law doesn’t have a negative impact on their property business.
“It’s clear from the Government’s figures that the post-fees ban landscape is likely to be an expensive one for landlords, at a time when the cost of letting a property has never been higher.”
He continues: “That’s why landlords need to shop around and explore alternative options to make sure they are getting value for money when it comes to necessary services such as tenant referencing and property advertising.”
Georgeson believes that technology and innovation will also play a major part in reducing costs to landlords. He has also said: “Products that utilise technology effectively can provide more efficient and time-saving processes at a lower cost than many traditional options.”
By providing landlords access to fully referenced tenants who have been credit checked by Experian, and listing available properties through companies such as Rightmove and Zoopla at a cheaper cost, companies such as RentalStep can save landlords money.
George concluded: “The rental market is changing at a rapid pace and, if landlords want to remain successful, they need to find solutions that can help them to keep their properties occupied for a lower cost.”