Introducing…Dan Smith, Head of Landlord & Agency

As the UK rental market adapts to the tenant fee ban "Beat the Tenant Fee Ban with LOFT", BTR and the hanging cloud of Brexit, agents and landlords must make the most of what they have. Intelligent design is the saving grace for any portfolio. As Head of Landlord & Agency, Dan Smith understands the impact good design can have on a tenancy. By giving clients advice and tailored furnishing packages, Dan can help agents earn commission through LOFT’s design services.We sat down with Dan to discuss the past, present and future of the rental scene, as well as how agents can make more money from a design partnership…

Hi, Dan. Can you tell us what the biggest concerns are for agents and landlords today?

The private landlord is slowly disappearing. It’s the direct result of regulation in the wake of this decade’s rental boom. Ten years ago, a lot of properties were flipped into rental homes as buyers were few and far between. Demand was huge and new houses weren’t being built, so prices kept climbing. But, eventually, the government has come to back the BTR model. That’s why we’re seeing regulatory measures clamp down on traditional landlords year after year – including the tenant fee ban. This is not to say that government intervention is unwelcome, because it does benefit Generation Rent. But since 22-25% of an agency’s income derives from tenants paying those fees, it can leave a big hole in their profits. Meanwhile, tenants want a better quality of housing, driven in large part by BTR and increased competition. Furnishings and Interior Design can make or break a rental agreement.

So the tenant fee ban is just part of a larger picture?

Yes. As the market becomes more regulated, transparency is vital – otherwise tenants will look elsewhere. Perhaps some agents have undervalued these legislative changes so far, but they’re coming, and they will have an impact.

What will we see from the 1st June, when the tenant fee ban comes into force?

A large volume of residents moving around as they don’t want to pay higher rent purely to make up for the fees on the landlord or agent’s side. This can only be averted if the properties themselves are more enticing and justify a rent increase.

How can this be achieved?

Considered interior design makes any property stand out. At LOFT, I’m able to suggest furniture packages that turn basic décor into a talking point. From a tenant’s perspective, they feel they are getting more for their money. This sanctions rent increases and boosts retention, avoiding void periods.

Would raising rent successfully cover the cost of the tenant fee ban?

Raising rent can certainly go some way to reduce the effects of the ban. But equally, agents can earn money by referring us to their landlords. LOFT pay commission to the partners we work with, giving them a second income. We take a small percentage of any rental income, or the sold price of any properties after property staging. The agent – or anyone who refers us, in fact – gets a return. It’s a reliable earning model that only gets more assured when our service is used on larger scales. An intelligent refresh solution can help get your landlords over the first hurdle of the tenant fee ban, and we can replenish those items in the future. Design fees are incorporated into the cost of the furniture itself, so the landlord receives a clear picture of all costs. We can act quickly because we hold £1.5m stock ourselves, as opposed to traditional retailers, who can take six to eight weeks to deliver. With, LOFT it takes just five days from consultation to delivery. Therefore, whether a tenant is moving in or a landlord is trying to sell up, LOFT can add value. This boosts your reputation.

Finally, any advice you’d give to those looking to plug the tenancy fee gap?

I’d ask them to think about whether their properties are going to stay competitive this summer in the current marketplace. I’d explain that clients, tenants and income might be at risk if they do nothing. With our insight into today’s demographics and expectations, we can advise on what tenants are willing to pay for. LOFT can serve tenants from student to graduate to multi-family and beyond, with tailored-made furnishing solutions. Our service offers vital support in a market that’s utterly different from where it stood 10 years ago.

To learn more about LOFT’s services before the tenant fee ban arrives, speak to a member of our team.