We have completed a much higher than usual number of business sales this month due to people rushing to beat the latest tax increase in the Spring Budget.

However there is something very unusual about our most recent group of business sellers and that is their age – nearly all of them are much younger than usual. Our clients used to be in their  late 50s 60s and 70s One was 94!  Now we are selling for people in their 30s and 40s so why has this changed ?

I think that the main reason that so many business owners are selling their businesses prematurely is that they are sick and tired of all the new rules and bureaucracy that  they now have to deal with.

They are sick and tired of all the new rules and bureaucracy that  they now have to deal with.”

They have also found that  the cost of complying with all this new legislation is so great that they are no longer able to make the level of profit from their businesses that they used to. No single piece of legislation is to blame it is the cumulative effect of impact of all of the different pieces of legislation that has caused the problem and things are clearly going to get worse very soon.

AML CHECKS

Let’s start by looking at AML checks. They used to be required only if the monthly rent on a property was over 10,000 euros per month. Very soon letting agents will  have to  to carry out AML checks on all their landlords and the extra cost of this will be huge.

In my own business we spend over £25,000 per year on complying with the AML rules.  We have never yet caught anyone trying to launder money by buying or selling a letting agency but the time we spend carrying out checks on all the buyers and all the sellers is huge.

RENTERS’ RIGHTS ACT

Let’s look next at the Renters’ Rights Act. The cost of complying this will be enormous. The big letting agents  already have specialist project teams who are working on this full time but the smaller agents do not have the resources to do this. The result will be substantial  fines for breaking the new rules or lost revenue from failing to re-engineer their charges to compensate for the ban on renewal fees.

EMPLOYMENT LAW

Let’s look next at employment law. Zero hours contracts will soon be made illegal which will make it much harder for agents to employ casual staff to help with viewings and holiday or sickness cover. A further problem is that new staff will be given employment rights on day one which will make recruitment much more risky and expensive.

HMO REGULATIONS

Finally for now lets look at the regulations that cover HMO properties. These have become so complex that a lot of small agents are so frightened of incurring a massive fine for breaching the rules that they are no longer prepared to manage HMO properties.

Our current government just doesn’t seem to understand the impact of the new legislation that they are introducing.”

Our current government just doesn’t seem to understand the impact of the new legislation that they are introducing and no one department is responsible for assessing the cumulative impact of all the legislation that is being introduced by different government departments.

I fear that the impact will be that the letting industry will become increasingly dominated by a small number of large firms who have the resources to deal with all the recent legislative changes and all the further ones that are coming soon.

Adam Walker is a business sales broker and management consultant who has worked in the property sector for 42 years.

PIC CREDIT: BBC NEWS