Not every regulation ends in a wave of insolvencies — and the Tenant Fees Act is the instructive counter-example. It was widely predicted to wipe out letting agents; instead it squeezed margins and accelerated consolidation. That distinction matters, and it is exactly the kind of nuance GalimAI’s data is built to hold: the difference between a company failing and a company quietly being absorbed.
What GalimAI’s own data reveals
Consolidation does not show up as insolvency notices — it shows up as ownership change, dormancy and dissolution, which is precisely what GalimAI tracks. Across the 463,022 property-owning companies and the 1,000,000+ owners we map, the structural response to a margin shock is legible: which companies stop filing actively, which are absorbed, and which owners restructure how they hold and let property.
For an investor that is the signal beneath the noise. A margin squeeze pushes marginal operators to exit quietly — visible in our work on dissolution acceleration and newly formed companies taking their place — rather than in dramatic failures. Reading that shift early is how you find owners ready to move.
What changed: the Tenant Fees Act, in plain terms
The Tenant Fees Act 2019 came into force on 1 June 2019. It banned most fees that letting agents and landlords could charge tenants — referencing, admin, renewal and check-out fees — and capped deposits. Industry estimates put the value of the banned fees at roughly £240m a year.
Agents lost a direct revenue stream overnight. Around two-thirds raised the fees they charge landlords in response, but on average recovered only about a quarter of what they had lost. The predicted mass closures largely did not materialise; instead, margins compressed and weaker operators were absorbed into larger groups.
The public backdrop
| Indicator | Figure | Note |
|---|---|---|
| In force | 1 June 2019 | Most tenant fees banned |
| Fees removed | ~£240m / year | Industry estimate |
| Recovered from landlords | ~25% of the loss | ~two-thirds of agents raised landlord fees |
| Agency closures | No clear mass increase | Margin squeeze and consolidation instead |
The honest reading is that the Act reshaped the industry without breaking it. That is a more useful lesson than a body count: regulation more often consolidates a market than collapses it, and GalimAI’s map is where that quieter restructuring is visible.
The most plausible mechanism
The channel is margin, not solvency. Removing a fee stream lowered agent revenue; agents recouped only part of it from landlords, so the least efficient operators became uneconomic and exited — usually by sale or dormancy rather than insolvency. Research found no clear rise in closures, which is itself the finding: a margin shock tends to consolidate rather than destroy. We present this as a correlation with a clear mechanism, not proof that the Act alone drove every exit; rents, rates and the wider 2019-2020 climate pushed the same way.
Sources
The proprietary figures in this study (the 463,022 companies, 1,000,000+ owners and the distress signals) are GalimAI first-party data. The public background figures are drawn from:
- How much has the Tenant Fees Act saved tenants? - PayProp
- Caps on letting-agent fees - The Conversation
Frequently asked questions
Did the Tenant Fees Act put letting agents out of business?
Mostly no. It banned roughly £240m of tenant fees a year and squeezed margins, but research found no clear rise in agency closures. The effect was consolidation - weaker operators absorbed or wound down quietly - rather than mass insolvency.
How much did agents recover?
Around two-thirds of agents raised the fees they charge landlords, but on average recovered only about a quarter of the income they lost to the ban.
What does GalimAI's data show?
GalimAI maps 463,022 property-owning companies and 1M+ owners, and tracks ownership change, dormancy and dissolution - the form consolidation actually takes. That makes a quiet structural shift visible where insolvency figures would miss it.
Why does this study matter for investors?
Because a margin squeeze pushes marginal owners to exit quietly. Spotting that shift early - via formation, dormancy and dissolution data - is how you reach owners who are ready to move before anyone else does.