The Tenancy Deposit Scheme (TDS) announced today that 87% (2,430) of member lettings firms have renewed their membership.
Letting agents had until the end of March to renew their subscriptions, following widely criticised price hikes. Countrywide, the TDS’s largest customer, chose to leave, announcing its decision on April 1. But the defection – to competitor scheme Mydeposits – has not delivered a body blow to the TDS.
With more firms’ subscriptions still being processed following the Easter break, the scheme says it is financially sound.
The board of The Dispute Service, the not-for-profit company that runs the TDS, also said this morning: “With the structure of the Scheme confirmed, the governance and management review already under way can be completed. Details will be made public over the next few weeks.”
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Comments
As stated in another thread TDS needs to really get its act together and maybe hope that DPS gets swamped and even slower on settlements so that agents think maybe TDS wasn't such a bad thing after all. What TDS must not do under any circumstances is get complacent because they haven't lost as many agents (and their fees) as they feared - if indeed they haven't given their previous difficulties with hard sums!!. My belief is that many agents are still weighing up their options including increased use of Assured Tenancies, using no deposit warranty schemes or taking additional payments up front, but all these those routes have flaws as dfo most schemes trying to get round well intentioned (if equally flawed) legislation. My guess is many agents who would have left, and who begrudge paying TDS' inflated fees they are now committed to because they have stayed, have only done so on the basis of paying 50% of the first invoice with the second part now compulsory for them to pay by June 30th. However then comes the time TDS really needs to be on its game - early July, the second invoice and the amount of time agents will then have to get organised if they do want to defect to another scheme. Many agents this time round have not done so because the fee in the end looked just about acceptable and, above all, because they have not had the time to fully weigh up the transfer options and especially for those with larger businesses, the volume transfer processes involved. July 1st when invoice 2 comes out to September 30th when the first 50% of it needs to be paid will give agents plenty of time to then make any change they’d have preferred to in March. So if the second invoices are in any way more than simply an identical mirror image of the first - and in many cases they will not be and will reflect further increases mainly because of disputes since last December - then TDS will be hit by wave two of the defections. And in March 2011 by wave three. What TDS should really worry about is the comment from Countrywide that cost was not the issue that caused them to leave, but service. Given that estimates guess their fee at £500K that's some poor service though whether they find life any more streamlined and sympathetic at Mydeposits is anybody’s guess. Meanwhile TDS members can see if their service improves given that there are now 13% less of them.