Tenant fees ban and extra red tape will cause ‘bonfire of the small letting agents’
Claim is made in latest trading update from franchise giant Belvoir, which says its fee income jumped by 22% last year.
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The lettings sector is to see many smaller agencies exit the market as increased regulation and next year’s tenant fees ban began to bite, it has been claimed.
Franchised lettings giant Belvoir has revealed in its latest trading update that the group expects to help its franchisees ‘mop up’ as increasing numbers of smaller local rivals shut down over the next year or more.
Belvoir also says it is doing well, despite its failed attempt to merge with rival The Property Franchise Group – owner of Martin & Co – in October last year.
Fees from franchisees increased by 22% and overall group revenue increased by 13% to £9.9 million, both figures boosted by its first full-year contributions from Northwood, which it bought in June 2016, and the recruitment of six new franchise owners.
Belvoir also says it is helping its franchisees expand as much through rental portfolio buy-ups as franchised branch openings.
The latest results show that its network hoovered up 23 such portfolios, adding £4.3 million to its network revenue and £400,000 to group fee revenue.
Tenant fees ban
“In 2017 Belvoir successfully supported franchise growth across all our brands through our Assisted Acquisitions programme and by promoting additional revenue streams such as property sales and property related financial services,” says Dorian Gonsalves, CEO of Belvoir.
“The Board is excited by the continued opportunities for consolidation within the sector, with the Belvoir Group well placed to take advantage at both a local and national level.”
City investors in Belvoir, whose shares are listed on London’s AIM market, seem to have taken the company’s bullish stance on board. Out of all the property PLCs, almost all of which saw their share prices reduced by the recent stock market slump, Belvoir’s bounced back the strongest.
Its share price increased by 10%, good going when compared to Purplebricks, which saw its share price increase by 7%.
