Traditional letting agents could be facing a ‘wipe-out’, according to a buy-to-let expert.
Harry Downes, founder and managing director of build-to-rent company Fizzy Living, has claimed that letting agents are in ‘crisis’ - all because of their own ‘greed’.
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42% of letting agents say fees ban is their biggest threat
Last month, a report released by property software company Fixflo found that 42 per cent of letting agents thought that the ban on tenanting fees would be their biggest challenge moving forward.
The changes are due to come in at the end of this year, and will prevent letting agents from charging tenants for the cost of inventory checks and referencing.
Downes, however, believes that letting agents are overlooking larger concerns that could threaten the traditional letting agent industry.
Buy-to-let changes impact letting agents
While most landlords are more than familiar with the myriad buy-to-let changes introduced over the past few years, Downes says letting agents are failing to take into account how these changes will affect them.
With landlords more hesitant to expand their portfolios - or deciding to sell some of their properties - letting agents are going to find there are far fewer opportunities for growth than there have been in recent years.
The squeeze on landlords caused by tax changes may also mean they turn away from traditional letting agents and decide either to manage their properties on their own, or look into the growing number of PropTech solutions out there.
Letting agent fees have ‘ballooned out of all proportion’
Downes believes that letting agents have ‘exploited’ their position, charging tenants more than is fair - which is why they’re now concerned by the loss of a single revenue stream instead of focusing on the bigger threats.
However, Downes remains hopeful that this change will be a wakeup call for letting agents and ‘engender a step change in the sector’.
Is this the end for traditional letting agents, or will they be able to change with the times? Let us know your thoughts in the comments