The Property Franchise Group announced that trading was “strong” during the first half of the financial year.
Despite a loss of tenant fee income, the group set a new record for lettings revenue at franchisee level in October, with a reported lettings income of £5.96m.
After a ban on charging tenant fees came into effect in June, the group feared revenue would decline as tenant fees once represented 16% of franchisees’ lettings revenue for the company.
However, an increase in landlord commission, which rose 10% to £4.28m in October, helped to “shift the burden of cost” from tenants to landlords, keeping revenue afloat. The group said this would not have been possible without a “high level of satisfaction” from its landlord clients.
It added: “It is largely thanks to mitigating actions encouraged by the group as a franchisor that its franchisees have managed to alleviate the impact of the tenant fee ban, alongside some pent up tenant demand feeding through.”
It is expected that the effect of the ban will be fully mitigated by June 2020, despite previous predictions that it would take until the end of next year.
Ian Wilson, CEO of the group, said: “We are delighted that the mitigating actions we’ve recommended to our franchisees have taken effect as hoped and at a good pace.
“We now expect to achieve full mitigation of the impact of the tenant fee ban a full six months earlier than originally hoped.”
He added: “Our ability to draw on our wealth of industry experience and act quickly to support our franchisee members provides us with a clear advantage in the market.
“At a challenging time for the industry, where many independent lettings agencies are considering leaving the sector, our Group continues to show its strength.
“The sales market has softened further in the second half, however our lettings business is outperforming our budgeted expectations. Our franchise business model has proven to be remarkably resilient in these testing conditions and we expect this to continue.”
The company also said it was confident that it would achieve market expectations for the full year.