Letting Agents will no longer be able to charge fees to tenants

Letting Agents will no longer be able to charge fees to tenants

8:33 AM, 23rd November 2016, About 8 years ago 111

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Letting Agents will no longer be able to charge fees to tenants

HM Treasury has leaked an extract from the Chancellors Autumn statement which will announce that Letting Agents will no longer be able to charge fees to tenants

Whilst the Chancellors announcement will no doubt be treated by tenants as good news, industry bodies do not see it that way.

David Cox, Managing Director, Association of Residential Letting Agents (ARLA), said …

“A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market. It will be the fourth assault on the sector in just over a year, and do little to help cash-poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account.

“Most letting agents do not profit from fees. Our research shows that the average fee charged by ARLA Licenced agents is £202 per tenant, which we think is fair, reasonable and far from exploitative for the service tenants receive.

“These costs enable agents to carry out various critical checks on tenants before letting a property. If fees are banned, these costs will be passed on to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents. The banning of fees will end up hurting the most, the very people the government intends on helping the most.”

Richard Lambert, Chief Executive Officer at the National Landlords Association (NLA), said …….

“The new Chancellor is clearly aware of the pressures facing those living in the private-rented sector, but in attempting to improve affordability he has shown that, like his predecessor, he lacks an understanding of how the whole sector works.

“There’s no doubt that some unscrupulous agents have got away with excessive fees and double-charging landlords and tenants for far too long. Banning letting agent fees will be welcomed by private tenants, at least in the short-term, because they won’t realise that it will boomerang back on them.

“Agents will have no other option than to shift the fees on to landlords, which many will argue is more appropriate, since the landlord employs the agent. But adding to landlords’ costs, on top of restricting their ability to deduct their business costs from their taxable income, will only push more towards increasing rents”.

Chris Sheldon. Managing Director of LettingSupermarket.com said ….

“It was only a matter of time before the legislation previously introduced in Scotland would filter into the rest of the UK so our business model was already prepared and ready for implementation. Our new fee scale to landlords will continue to be the most competitive in the Country offering full management for just 5% of rent (6% for properties inside the M25) and letting fees of just £100 per new tenant (£150 inside the M25). We will not charge for renewing tenancies for existing tenants”

Contact LettingSupermarket.com


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Comments

Fed Up Landlord

14:05 PM, 23rd November 2016, About 8 years ago

Reply to the comment left by "Michael Jones" at "23/11/2016 - 13:51":

Michael- tenant referencing is just that - referencing. If you want any form of surety then you need to get rent guarantee insurance.

Steve Masters

14:36 PM, 23rd November 2016, About 8 years ago

Reply to the comment left by "Gary Nock" at "23/11/2016 - 13:38":

That's right Gary, "The markets sets the rent". The market is driven by supply and demand which is provided by... tenants and landlords. If most landlords put up their rents but some don't there will be a few lucky tenants but when those cheap tenancies have been sapped up the rest will have to go at the new higher rate and that will be the new market. Am I right?

I don't charge market rate, I charge a fair rent just below the market rate that gives me a reasonable profit but allows me to pick and choose the best tenants. I can and will and have put up my rents and I still find and keep good tenants.

Rents will continue to rise as a result of all the government's interference in the market.

How can that be good for tenants?

If the governments wants to really help the housing market, BUILD MORE HOUSES.

More housing stock will increase supply and reduce prices.

That's how the market works. Supply and Demand. Not regulation.

Fed Up Landlord

14:55 PM, 23rd November 2016, About 8 years ago

Reply to the comment left by "Steve Masters" at "23/11/2016 - 14:36":

Steve I agree and they can build as many houses as they want but will FTBs be able to buy them. Will landlords want to buy them after the kicking we have had and are still having? I don't think so. So who will build houses that no one wants to buy? A bankrupt builder!

Steve Masters

15:16 PM, 23rd November 2016, About 8 years ago

Reply to the comment left by "Gary Nock" at "23/11/2016 - 14:55":

The government must properly support and encourage house building AND first time buyers.

If it becomes cheaper to buy than rent then market forces will be in action once again, to the good of all.

I don't want to highjack this thread and go off topic, I just want to point out that there are far better ways for government to achieve it's objectives on the housing market than handicapping landlords. Unless they have a hidden agenda of course!

Arr yes off course that's it!! The government WANTS to increase rents whilst appearing to help tenants, that will be a lot cheaper for them than subsidising house builders and first time buyers! It will become for more expensive to rent than buy, and market forces will be in action again. It has just become very clear to me now.

gary dave

16:47 PM, 23rd November 2016, About 8 years ago

Is there any indication when this legislation will be implemented?

I am due to sign a tenancy agreement in December with a tenant fee of £800....very very painful given that I am a landlord and have never once used an agent that charges my tenants any fees!!

Luke P

16:49 PM, 23rd November 2016, About 8 years ago

Reply to the comment left by "gary dave" at "23/11/2016 - 16:47":

I understand the date is 'to be reviewed' (expected to follow a period of consultation). The devil will be in the detail, I guess.

Mark Alexander - Founder of Property118

16:52 PM, 23rd November 2016, About 8 years ago

Reply to the comment left by "gary dave" at "23/11/2016 - 16:47":

How on earth can you possibly justify charging your tenants an £800 fee?

Surely you must mean you will be taking an £800 deposit? If so, that's fine, that's not what this is all about.
.

Fed Up Landlord

16:52 PM, 23rd November 2016, About 8 years ago

As soon as possible Phil Hammond says. There was a Private Members Bill going through and they brought this in instead. Was this to get control over it? I don't know. All I do know is it is another kick in the ribs to landlords and agents.

Fed Up Landlord

16:55 PM, 23rd November 2016, About 8 years ago

Reply to the comment left by "Mark Alexander" at "23/11/2016 - 16:52":

Mark I think "gary dave" is a tenant being charged £800. Which is extortionate. £100-£120 is tops really.

gary dave

16:59 PM, 23rd November 2016, About 8 years ago

Reply to the comment left by "Mark Alexander" at "23/11/2016 - 16:52":

Mark,

I am a landlord and have never used an agent that has charged one of my tenants a fee, my tenants only have to pay deposit and rent.

Due to the nature of my work I generally change countries / cities every 6 months so despite being a landlord I am myself also a tenant. I will personally being paying an £800 fee to rent a property that I am about to move into. As outrageous as that sounds a 50% fee of one months rent seems to be the norm in the city I am currently in!

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