Letting Agents Fees to Be Banned. Thoughts?

[bennyboy77 10]

Lettings Agents Fees To Be Banned

 

Lettings agents in England will be banned from charging fees to tenants "as soon as possible" under plans announced in the Autumn Statement.

 

Mr Hammond said he would take aim at the charges letting agents can levy on tenants for services such as administration and referencing. The government believes the ban – to be brought in “as soon as possible” following a consultation – will help millions of households in private rented housing by sparing them what can amount to “hundreds of pounds in fees”

 

We have seen these fees spiral, often to hundreds of pounds,” Mr Hammond said. “This is wrong. Landlords appoint letting agents and landlords should meet their fees.”

 

But how will this affect Landlords and tenants moving forward?

 

If the costs are levied at landlords, will rents increase therefore tenants could well end up footing the bill anyway?

 

Will it drive up competition from potential tenants there the demand could be higher and rents may increase?

[mafya 248]

The charges will be passed onto landlords who will then increase rents, instead of banning them they should have just capped the amounts chargeable.

[Margarita Ma 10]

I am a small Landlord. I have only ever once used an agent not for letting but for return of keys from an abusive manipulative and deceptive tenant who had been given a lot of leeway as to paying rent owed. I was not prepared to be left open to any more abuse by having direct contact.

This will not affect me or my tenants in any way as I have no intention of using an agent for letting. It is against my principles that tenants should be charged for the same service that the Agent is charging the Landlord. How they can justify this is something that cannot be fathomed. I have an idea though that they will tie themselves in knots trying to do it. These fees seem to have taken the place of KEY MONEY that was regularly charged to tenants on top of Deposits that the agents and some landlords had no intention of returning, no matter if the tenant left the place spotless by scrubbing the floor as they went, this is what I did when leaving the first flat I had with my husband, I have been a tenant so I can see the other side of this coin. I don't like being tarred with the same brush that is used for bad landlords and grabbing agents. If you are interested in this thread because you are looking for a home: some private landlords now let through the council; to avoid Agents and the council have standards that they lay down for the dwelling so that you know it is considered safe.

Edited November 25, 2016 by Margarita Ma
Added info and punctuation.

[Cyclone 10]

The charges will be passed onto landlords who will then increase rents, instead of banning them they should have just capped the amounts chargeable.

 

If it makes you happier, consider it capped at £0.

 

Letting agents already charge landlords about 15% of the monthly rent. This should be plenty to cover the administration of getting tenants in.

[mafya 248]

If it makes you happier, consider it capped at £0.

 

Letting agents already charge landlords about 15% of the monthly rent. This should be plenty to cover the administration of getting tenants in.

 

I don't use letting agents myself as I self manage but the actions of the rogue letting agents is now going to effect the decent letting agents.

[Hippogriff 10]

I use an Agent for a bespoke Tenant Find service... I do the viewings and negotiation. The part where the Tenant pays their application fee to the Letting Agent is when you know they're more than a tyre-kicker. After the viewing(s), after negotiating, they've now put their money where their mouth is and the ball is finally rolling.

 

I pay the Agent for this. The Tenant pays the Agent for this. I can handle me paying the Agent me for this too, but I am somewhat concerned about potentially me having to pay >1 fee to the Letting Agent as Tenants may mess around, prevaricate and simply change their mind. Do I now need to start looking at Holding Deposits, not a thing I've ever had to do, to get that positive vibe and progress to referencing off my own back?

 

The Government said - Landlords have the choice of which Letting Agent to use, so they should pay their fees. That's a bit simplistic. What is really meant is that some Tenants can get stung by greedy Agents who charge a lot for these basic services. A nationwide cap would have been smart, if achievable. If the money just gets paid-out by the Tenant anyway, but over a longer term - and possibly amounting to much more if Landlords do their sums on, say, a tenancy lasting for 12 months, then who's lost out if the tenancy lasts 5 years?

 

Landlord pays out an extra £500 in fees, so they increase rent by £40 per month so that 'hit' is absorbed in year 1 (12 x £40 = £480)... but the Tenant is paying-out that extra £40 per month for as long as the tenancy may last. It will be a rare Landlord who'd consider anything else. No-one likes money to just be taken from them so it needs to be seen what effect this may have.

 

For now, I'm open-minded but cautious.

[Cyclone 10]

Just don't consider the ball to be rolling until they pay the 1st months deposit...

 

And if your agent tries to increase the fee's charged to you, go and find another agent, it's a competitive market.

[Hippogriff 10]

It will not be unexpected for Agents to raise the fees to Landlords. Any who didn't would be saying they're also OK with someone putting their hand into their pockets. If you already work with who you've assessed to be the best (cheapest, fairest) Agent then it's unlikely another company would attract your attention.

 

Not sure what a "1st months deposit" is.

[Margarita Ma 10]

It will not be unexpected for Agents to raise the fees to Landlords. Any who didn't would be saying they're also OK with someone putting their hand into their pockets. If you already work with who you've assessed to be the best (cheapest, fairest) Agent then it's unlikely another company would attract your attention.

 

Not sure what a "1st months deposit" is.

 

Perhaps he means The Deposit which often equals the first months rent. I never consider the place taken until the deposit is paid.

[the_bloke 17]

Last time I renewed a contract on a rented property with Blundells, it cost me £120 for them printing off a duplicate of the original agreement and entering the new date by hand. Presumably it's practices like this which are to be banned. Absolutely no justification for the cost at all.

[onlineo 10]

The fees are stupid. I remember the last time I rented about 10 years ago. It was a house share with 2 other colleagues, the place we eventually got used charged us £300 each for applying, with no refund if we were not accepted. There was then credit checks and more fees adding about £150 each. When it came time for renewal they wanted the same feea again. We said no, phoned up the owner explained that we wanted to renew but would not renew and would leave if there was any fees to pay at all. The owner promptly dropped the agent and let it to us themselves. I don't think agents are awful and they can be useful but lots of times they add unnecessary costs into the process without much upfront advertisement of fees. If you have just dropped over £1000 on application, then the agent says you can have it but now you have to pay £200 inventory fees then you pay them. If these fees were all listed upfront in the advert there is no way you would ever look at the property.

[Margarita Ma 10]

The fees are stupid. I remember the last time I rented about 10 years ago. It was a house share with 2 other colleagues, the place we eventually got used charged us £300 each for applying, with no refund if we were not accepted. There was then credit checks and more fees adding about £150 each. When it came time for renewal they wanted the same feea again. We said no, phoned up the owner explained that we wanted to renew but would not renew and would leave if there was any fees to pay at all. The owner promptly dropped the agent and let it to us themselves. I don't think agents are awful and they can be useful but lots of times they add unnecessary costs into the process without much upfront advertisement of fees. If you have just dropped over £1000 on application, then the agent says you can have it but now you have to pay £200 inventory fees then you pay them. If these fees were all listed upfront in the advert there is no way you would ever look at the property.

 

The correct term for these fees is profiteering and the reason that I will not use an agent. While it is reasonable to charge for time spent showing a property and brochures and agents need to cover their costs many of the charges made are spurious and it is in my mind unfair to charge for checks on references obtained by a tenant. An inventory should be part of a letting contract. When a complete house is being let, as is often the case with students sharing, then the viewing should be made as a group, or a specific day set aside for the purpose. Anyone with a modicum of organisation would do this in any case. I advise anyone looking for accommodation to look on Gumtree and Spare Room. Don't pay money or give credit card details until you have seen the property and a signed contract with full details of the place is in your hands. Both you and the Landlord/Agent should have a copy. My practice is to give prospective tenants a copy to take away with them and read before committing themselves. This gives me a chance to check their references. Don't be surprised if Landlords/Agents ask for ID passport or other ID. as we now have to check that tenants have a "Right to Rent" the law came in last year.