Breaking down the challenges of the tenant fees ban and finding solutions
In the Autumn Statement, Phillip Hammond announced that the treasury WILL be banning tenant fees. I’m sure this came as a shock to the lettings industry across England; prior to this date, the idea had been batted about but nothing really concrete had been agreed. Further confusion comes from the fact that many politicians were stating that this just would not happen, but now we are trading under a threat of tenant fees being banned at any time. Even though the ban will likely be imposed 12-18 months from now following a consultation from DCLG, this means that plans and changes have to be made FAST. We also need to remember that the tenant fee ban is coming at a time when online agents are making headway into the market. Legislation as a whole is getting tighter and tighter, meaning our roles as agents are getting more and more complex. Furthermore, there seems to be an ever-increasing number of letting agents joining the already stretched choice of agencies, meaning threats are coming from all directions for the traditional agents, so what should a letting agent do… If we break the challenges down, then the solutions seem to come in 5 different areas as follows:
- How to increase INCOME to replace the lost tenant fee income and value of what service you are offering
- How we can streamline and reduce TIME spent on the ever-increasing amount of legislation
- How we can GROW our businesses to increase our penetration into an ever-decreasing market
- How to improve our CONVERSIONS on the leads that do come to us
- And, how to get our teams really MOTIVATED and firing on all cylinders to make the mot of every opportunity
Let’s look at each one individually.
5 solutions to the tenant fees ban
INCOME– How to increase INCOME to replace the lost tenant fee income and value of what service you are offering
To increase income there are a few challenges. Firstly, how do you increase the number of new leads that come your way? Secondly, how do you make more pounds per deal? If you increase either of these two areas and do everything else in the same numbers as you usually do, you will increase income, but if you could do both…Then you would surely be making more? so here are a couple of things to look at:
- To increase your leads, you need to REACH more and more people than you ever have before. PWC state that per £1 spent on digital marketing, companies are seeing a £14 return compared to £1.20 on traditional I would take this as my cue to focus on digital – social media, promoted posts, emails marketing, blogging, etc. – to increase the number of people hearing about you and talking about you.
- Secondly consider value, or more specifically whether you are charging enough for what you do. I know, I know, “landlords won’t pay”, I hear you say, but hear me out… Remember what you did for your fee 15-20 years ago – does it bear any resemblance to what you are doing now? In most cases, agents are doing twice as much and just bundling the whole thing into the same fee. Start breaking down what you do for your money in comparison to what other digital agencies are doing and create comparable services. You might be very surprised at the difference in how much landlords are willing to pay when packaged differently.
TIME – How we can streamline and reduce TIME spent on the ever-increasing amount of legislation
Given that agents are typically doing twice as much for their money now compared to what we used to do a decade ago, it really is time to identify if there is a cheaper or faster way of providing this service. Software can seem expensive and time-consuming to integrate, but staff are getting more and more expensive too. Every time someone leaves, the time taken to retrain new staff is a drain on your business and resources, so really look into what products may help you. At the ARLA meetings and conferences, there are many suppliers showcasing products that can significantly cut the time taken to manage property, from setting up a tenancy file to handling utilities. You may be pleasantly surprised at what can be done now through technology and how much money and time this can save you and your team, so that you can focus on generating more business and winning market share.
GROW – How we can GROW our businesses to increase our penetration into an ever-decreasing market
Market share is where it is at, so grow and dominate your ground wherever possible. The big agencies are doing this all over the country; why not join in? Whether you join forces with another agent in the town, join a network or buy another portfolio or competitor, there are many options. By doing this, you could quickly double the size of your agency and become a serious player in the town overnight.
CONVERSIONS – How to improve our CONVERSIONS on the leads that do come to us
Another way to grow your income, without attracting any more leads or increasing your income, is to improve your conversions. When did you last carry out sales training on your team, or closely monitor the staff performance and conversion rates or up-sells? Would they be better? Now is the time to make sure that you sales team are squeezing every last drop of juice out of every deal and achieving top level conversions. With ever-increasing salaries, this is more important now than ever before, so strong KPI management, goal setting and expectation management is required.
MOTIVATION – How to get our teams really MOTIVATED and firing on all cylinders to make the mot of every opportunity
A strong-performing sales team is a motivated sales team. They will be your strongest asset through this tough time ahead, so it’s worth spending time working on pulling them together, identifying their goals, dreams and desires to see if they match your business goals, and potentially making some team members a bigger part of your business. I always employ on character and train skills, but whatever your employment style, we all recognise as employers that ambitious and motivated staff are worth keeping. Start talking, sharing and bringing the key players into the fold. Give them focus and a share of the dream, and the results will be amazing. So there you have my top 5 tips on getting through the tenant fee ban and all the other challenges that are heading our way this year. if you would like to know more, I will be sharing our full “Beat the Tenant Fee Ban” system at Property Agency Intensive – Click HERE to find out more.