The government’s impact assessment of the Renters Reform Bill shows that the changes will cost letting agents £278.7m.
As published by the Department for Levelling Up, Housing and Communities, the assessment revealed the costs to letting agents would be caused by reduced use by landlords, due to changes from assured shorthold tenancies to periodic tenancies, and the removal of section 21 resulting in fewer tenants moving.
According to software platform PayProp UK, these noted costs — estimated over a course of 10 years — do not take into account the time agents will have to spend familiarising themselves with the new measures contained within the bill.
The impact assessment states agents will benefit from the property portal, as they will be able to register on behalf of landlords and charge for this service.
The document concludes that the main costs of the Renters Reform Bill will be borne by landlords, with the estimated net cost to the business owners coming in at £10 per rented property annually.
However, at a recent Levelling Up, Housing and Communities Committee oral evidence session, the housing and planning secretary Rachel Maclean MP, admitted that it is the department's intention to introduce measures currently missing from the bill — including the Decent Homes Standard — as an amendment in the House of Commons.
Neil Cobbold, MD at PayProp UK, commented on the costs to letting agents: “Let-only agencies will rightly be concerned about potentially losing £278.7m because of the Renter’s Reform Bill.
“But savvy agents will have already spotted the opportunity in the proposed regulatory changes.
“It will be key to convert existing let-only landlords into fully managed clients, [while] charging landlords a fee for services including rent collection, maintenance and compliance with the bill and the hundreds of other rules that govern the PRS, to boost agencies bottom lines.
“For agents and landlords to properly assess the impact of the bill on their businesses, we need more information from the government on how some of the measures will work and when they will take effect.
“Details on court reforms to speed up evictions, the property portal and the new ombudsman will be essential.
“We also want to see the Department for Levelling Up, Housing and Communities publish a revised impact assessment if new measures are introduced as amendments, allowing all involved in the industry to judge the potential costs and benefits of any changes to the proposed bill.”
