This time last year, letting agents were contending with a fall in the number of rental properties, with Home.co.uk reporting a drop of 24% (as at August 2018) in the number of homes to rent in London that had been on the market for 20 weeks or fewer. Now, with the Tenant Fees Act agents are not only competing to rent out fewer properties, but with a reduced income.
The UK rent guarantor service Housing Hand is offering a ray of light (albeit not a direct substitute). Beginning with letting agents in the UK (with a later rollout to Ireland planned), the firm is trialling a rent guarantor service focused specifically on letting agents’ needs in the new post-Tenant Fees Act world.
The trial of a new batch-based commission structure will give agents the opportunity to enjoy a new income stream as well. The 25 selected agents/branches have been chosen to avoid crossover with Housing Hand’s pre-existing partner arrangements with other affiliates.
The initial trial runs for 12 months. Letting agents refer applicants to Housing Hand for processing, then invoice the company in batches. The system allows agents to earn £25 each for the first batch of 15 tenants that use Housing Hand as the guarantor, £35 each for the next batch of 15 and £50 each for any further tenants. The transparent structure has been developed in full compliance with the Tenant Fees Act, to deliver legislative compliance, a new source of income for letting agents and a fairer deal for private tenants.
Jeremy Robinson, Group Managing Director, Housing Hand says that Housing Hand has already worked with over 3,000 accommodation providers, helping and processing 70,000 applicants and covering £120,000,000 in rent. “This has given us a deeper understanding of the issues that both tenants and lettings agents face when it comes to guaranteeing rent and managing risk. While many companies are dressing up what are essentially just insurance products as ‘rent guarantee services,’ we’ve worked to develop a completely different product – one that works more effectively for both parties.”
“The market is changing, we’ve designed our trial to support agents to deal with the post-ban lettings landscape more efficiently. We look forward to analysing the results and expanding the trial in due course.”