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 5 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



Comments

by Trendo

1:46 AM, 25th November 2016, About 5 years ago

Effective time management to pre qualify potential tenants is something most agents i know are extremely poor at doing.
Very few have proper "sales" or "closing" training or skills. In fact a 5 yr has better than most !
simple Q's i ask when an agent books a viewing with me :
How old?
Occupation?
How long term are they looking for ?

Usual answer - "dont know will find all that out when i do the viewing ! "

Stroll on, i hang potential tenants upside down by their ankles and shake them hard verbally on the phone before my butt stirs from my chair & even thinks about when i am going to book a viewing !

Before the end of the convo i am generally checking out there habbits and holiday snaps on face book which can be a great guide to who & what you are dealing with - the stupidity of what some people put in the public domain is astounding ..but very helpful to people like us !! "landlord wants me to leave because housemates are moaning about the smell of my weed " was a particularly helpful pointer that ensured i didnt waste anytime on a viewing !

"work smarter - not harder !"

by Jonathan Clarke

8:59 AM, 25th November 2016, About 5 years ago

Reply to the comment left by "Trendo " at "25/11/2016 - 01:46":

I agree. I have been asked on numerous occasions by agencies to give a landlord reference for my tenants. Their DD on me is virtually non existence. Often not even a phone call but just a 3 question yes or no answer by e mail. This is done by an outsourced 3rd party often.

I could put anything in like in there. Its not confirmed or verified with me. If it is a tenant who i want to leave if say i was selling the property human nature is such that i am hardly going to give them negative answers to thwart my own plans.

When they do ring rather than e mail me they take no time whatsoever to more than scratch the surface. They just want basic info. The disinterest they show in their job is palpable as they rush through their questions no doubt to meet some quota their end. If I try to expand on an answer its met with a hurried yeah yeah yeah response with no follow up questions or real acknowledgment of what i have just said. They want to end the call and get on with the next one. Its just a production line.

This is one of the many reasons that i self manage. I feel it is a specialised skill to interview a prospective tenant. Far too many landlords leave their valuable 200K asset expecting maybe 10K pa income from it in the hands of a young inexperienced outsourced third party who is disinterested, untrained and so disconnected to the service you actually want and pay for from an LA

by Rod Adams

9:14 AM, 25th November 2016, About 5 years ago

Reply to the comment left by "Jonathan Clarke" at "25/11/2016 - 08:59":

The poor tenant referencing your seeing is more than likely a symptom of the race to the bottom with the percentage fees that some agencies get involved in order to get business. If you pay peanuts.....

Regards,

Rod.

by Anita Heapy

22:14 PM, 27th November 2016, About 5 years ago

Reply to the comment left by "Mark Alexander" at "23/11/2016 - 12:09":

Isn't it crazy that a letting agent or landlord will not be able to charge for a credit reference but the tenant is allowed to buy one from a credit referencing agency instead? It is taking money out of one industry and just handing it over to another? Why should a whole industry be punished in this way because of a few money grabbing greedy agents who have been hiding fees and overcharging? Sort the criminals out, don't punish the innocent agents along with them. It is like Victorian times, caning every child in the class because the real culprit wouldn't own up!

by Anita Heapy

22:29 PM, 27th November 2016, About 5 years ago

Reply to the comment left by "Mark Alexander" at "24/11/2016 - 11:47":

Could letting agents and credit referencing companies be plotting in this way, because credit searches actually cost money, time and resources? What the government have done in Scotland and plan to do here is a total insult to administrators and office workers of all kinds,including letting agents, inferring that paperwork is an unnecessary evil and the labour and knowledge needed is of no value and not worth paying for! So they say - just get the landlord's to cover the costs instead! Well they wont! And why should they when they are being pushed for more money in every direction. It has hardly helped that lettings agents admin has just been increased, now having to give out a How to Rent Guide, and prove that all the prescribed documents have been served, as well as checking nationality under the Right to Rent Law. They just keep piling it on and then pull away the rug and tell us to do it all for free! When deposit regulation first came in, we were not allowed to charge the tenant for the registration, as we are still not. We asked our landlords to help cover these extra costs and memberships but it was 'all the toys out of the pram' - we managed to recoup a share of it, but most of the cost came off our bottom line. As letting agents who have never hidden fees, never charge for checks outs or renewals or force tenants to use professional cleaning companies, we do not have massive reserves to cover this loss so will have to make cost savings everywhere and make some modest rent increases to help make ends meet. I am quite appalled that this government, who have tripled my workload over the last few years believe that the real honest work I do every day is not worth a tenant paying for.

by Anita Heapy

22:43 PM, 27th November 2016, About 5 years ago

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

This is so true. The shortage of property available is driving rents up. And who's fault is that? Not all those private sector landlords who invest in property and present them to a high standard. I do not understand why the government is attacking the PRS in this way?

by Gary Nock

23:12 PM, 27th November 2016, About 5 years ago

We are prey to the vested corporate interests that have covertly arisen. The unprecedented attacks on the PRS over the last 12 months are no accident. They are by design. Never have we seen such an assault. Even under a Labour government.

by Whiteskifreak Surrey

23:17 PM, 27th November 2016, About 5 years ago

Reply to the comment left by "Anita Heapy" at "27/11/2016 - 22:43":

Anita - please look at the thread: https://www.property118.com/92625-2/92625/
It will explain why.

by Arnie Newington

9:44 AM, 28th November 2016, About 5 years ago

The ban on letting agent fees along with a number of other tenant friendly policies such as The Deposit Scheme, CO detectors, Legionnaire checks, mains wired smoke detectors, EICR have increased rents in Edinburgh by £140 per month.

I calculated this figure using the rent indices provided by Citylets for Edinburgh for 2008-2012 and extrapolating them to 2016 then comparing them to the actual rental increases from 2012-2016.

I sympathise with ordinary tenants that rent is going to be driven up by a noisy minority of lefty tenants, two loony lefty organisations and a government playing to the galleries.

by Gary Nock

10:03 AM, 28th November 2016, About 5 years ago

Then there will be the clamour for rent controls because rents have gone up. You couldn't make it up!


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