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Letting agents could lose almost £400m under Renters’ Rights Bill

New government research shows the loss in fees is significantly higher than if the Conservative-led Renters (Reform) Bill have been introduced.

This month the Ministry of Housing, Communities and Local Government published the Impact Assessment which shows the impending Renters’ Rights Bill will cost letting agencies £391.7million over the next ten years as a result of leading fewer landlords to agency services.

white and red wooden house beside grey framed magnifying glass

If this wasn’t enough of a blow, the report also shows the significant financial loss is 40% higher than the projected £278.7million which is what the Conservatives estimated estate agents would fall short of if they implemented the Renters (Reform) Bill.

 However, instead of focusing on the negatives, Neil Cobbold, commercial director of Reapit, has claimed ‘there are opportunities for forward thinking agents to adapt.’

‘Key strategies include converting let-only landlords into fully managed clients, as the government puts the figure down to fewer tenants moving – which will shift earnings from one-off placements to monthly recurring service fees,’ Neil said.

‘Providing value-added services such as compliance management, rent collection, and tenant communication can help mitigate the potential revenue loss associated with reduced tenant turnover and increased operational demands. Demonstrating the value of an agent’s expertise in delivering a better rental experience for landlords and tenants will therefore be critical. 

‘Nevertheless, letting agents, landlords, and tenants need further clarity from the government on various issues. For example, details on the scope and functioning of the Private Rented Sector Database and Ombudsman are critical to help the industry plan and adapt to the Renters’ Rights Bill which we expect will become law in 2025.’

The Renters Rights Bill was first introduced into the House of Commons on 11th September 2024 and has just entered the report stage. It is expected to become law in Spring 2025 and its main aim is to abolish section 21 evictions and ensure all tenancies become periodic, providing more individuals with security at home.

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Emily Whitehouse
Writer and journalist for Newstart Magazine, Social Care Today and Air Quality News.

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