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Tenant fees ban: ‘a sledge hammer to miss an egg’

Leading lettings agent delivers withering verdict on the Tenant Fees Bill and its unintended consequences for the industry.

Nigel Lewis

A leading lettings agent has criticised the tenant fees ban for being implemented too hastily and unlikely to solve the housing affordability problems it was designed to.

The comments have been made by Tim Hassell (pictured, above), managing director at London lettings firm Draker, to The Negotiator.

He goes on to say that: “To ban companies from charging transparent fees for services is an overstep into private industry actioned in a blunt and lazy way.

“However, regulation is crucial; far more work needs to be done in this area, but government needs to allocate proper time and resources into refining regulation rather than using a sledge hammer to miss an egg.”

Hassell has also suggested that agents who didn’t change their models prior to the fees ban are likely to be thinned out.

Tenant fees

“The smaller agents that try to undercut more established companies by offering lower fees to landlords will face immediate financial pressure and will need to start charging proper fees to landlords at speed to survive,” he says.

“Many of these agents may have made up a larger proportion of their income from the overcharging of tenants for arranging a tenancy.”

Hassell was also asked about the rise of the ‘branch-less’ agency network within the industry and the threat it poses to traditional agencies.

“Those that choose to operate from a cheaper location will need to compensate by spending more money and time on marketing to remain visible,” he says.

“There is a dying myth that established agents do not invest in technology.  This has been the drum that all proptech companies have been banging over the last five years; the truth is very different.

“Foxtons, Savills and many other larger brand agencies have been investing a huge amount of capital in using technology for years to enhance the service that they give. The big difference is that they have not used this as a marketing tool to be seen as a disrupter”.

 

September 25, 2019

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