Letting Agents Fees to Be Banned. Thoughts?

[Bob Arctor]

Absolutely, I do this myself. At the end of the initial 6 month fixed term I offer the Tenants the opportunity to go for another fixed term or periodic - I have always had them choose periodic... because they know they have security, as I'm not letting out my former home that I might need to move back into, and they like the flexibility (just in case). I make no charges whatever choice is made.

 

---------- Post added 05-12-2016 at 10:06 ----------

 

 

 

It's the lump-sum angle that might be better for Tenants, agreed. However, if it does end up with them paying more in the long-run, I ask - who's lost out?

 

You're clearly a good landlord - good for you

[vincentb]

P.S. - the question wasn't to you, it was to spyan - I was curious about what he'd prefer out of paying a one-off upfront (but quite large) fee, or seeing the rent increase by a modest amount over time, and for the duration of the tenancy.

 

Hi Hippogriff; would it be practical to have the rent increase for an initial period, and then reduce to what you normally charge? That way, you get the income from the rents to offset your extra start-up costs, but you aren't committing the tenant to paying an increased rent forever.

[Hippogriff]

A Landlord could do that... my feeling is that they wouldn't. What I am concerned about here, which hardly anyone else seem to think is a real possibility, is the real lack of transparency.

 

At least with those Agent application fees (distasteful, big up-front hit, lack of value-for-money) you are aware of what you're paying before you get into it... and you can walk away, even if it means walking away from a lovely potential home.

 

Anyway, time will tell.

 

A Landlord could also give 1 free month of rent per year... around Christmas... but it's a rare one that does, I bet (I hear some LHA specialist Landlords do actually do that, in month 13) but I'd never understood whether they meant just the top-up aspect of it, or the whole thing... obviously if the Landlord is being paid direct, that would mean money would be going the other way... and I'm not sure the Council would like that either. A whole other topic...

[marcd]

I had one such run in with an estate agent many years ago, I had no idea they tried to charge fees to the tenant so imagine my surprise when I phoned the agent to say I would take the house and he then went on to explain I would need to pay him. Not only that but if I didn't pay him he wouldn't take it off the market, of course he'd had somebody 'very interested' just call in to book a viewing that very moment... Complete clowns.

 

I told him where to go and rented privately instead.

 

The landlord engages that agency, the landlord should pay.

 

Fees didn't go up in Scotland and they wont go up in England. Why? Because as mentioned earlier in the thread, the fees charged to the tenant are PROFITEERING. The work undertaken vs the fee charged is unreasonable.

 

The market has had every opportunity to self-regulate but they refused and hence a ban is in order.

 

Disgusting behaviour that is well overdue for regulation, at the very least show some transparency in your business practice. I really feel for anyone who had to pay these fees and wish there could be some grounds for repayment like PPI misselling.

[Hippogriff]

What do you mean "Fees didn't go up in Scotland..."?

 

Are you talking about rents not going up? What you describe as a lack of transparency is exactly the opposite - it is transparency.

 

What you describe as private renting is what you were trying to do anyway, just with an Agent involved... I think you mean you went directly to a Landlord, avoiding the Agent?

 

Both are private renting. You appear to be a little bit confused by this. In the new world, the Landlord will pay the Agent and the Tenant will pay the Landlord, but for longer and for a larger amount in the long run, and it will all be very opaque. It's still a Landlord's market out there - there hasn't been this massive reduction in people needing to rent or this massive over-supply of housing.

[onlineo]

What do you mean "Fees didn't go up in Scotland..."?

 

Are you talking about rents not going up? What you describe as a lack of transparency is exactly the opposite - it is transparency.

 

What you describe as private renting is what you were trying to do anyway, just with an Agent involved... I think you mean you went directly to a Landlord, avoiding the Agent?

 

Both are private renting. You appear to be a little bit confused by this. In the new world, the Landlord will pay the Agent and the Tenant will pay the Landlord, but for longer and for a larger amount in the long run, and it will all be very opaque. It's still a Landlord's market out there - there hasn't been this massive reduction in people needing to rent or this massive over-supply of housing.

 

You may be correct for your properties for the foreseeable future but the stats from Scotland show that you are incorrect for the majority of landlords, no matter what the landlords are currently saying. "the fees charged to the tenants are PROFITEERING" and these in course will reduce when paid by the landlord.

 

There are fees that landlords pay that are not passed on directly to the tenant such as gas safety certificate, repairs, renovations & insurance. The landlord chooses the best person or company for the job based on convenience, price, timescale, quality etc. This does NOT happen with agents fees as most landlords consider price to themselves, not the whole price of the agent. So, good agents who seem cheap to the landlord get the most jobs when in fact they might be by far the most expensive agent in total fees. The landlord never sees the tenant fees so these don't calculate. Now landlords will see and pay these fees too. This will be a massive positive change for tenants, high quality agents with competitive overall fees and possibly even some landlords like yourself who can pass on the cost increases.

 

Many landlords will be able to switch agency and keep very similar costs as the market will get more competitive. There is not a free market that works well when the person who makes the purchasing decision (hiring an agent) is not aware of the costs and/or knows a third party will have to pay the costs no matter what.

[mafya]

You may be correct for your properties for the foreseeable future but the stats from Scotland show that you are incorrect for the majority of landlords, no matter what the landlords are currently saying. "the fees charged to the tenants are PROFITEERING" and these in course will reduce when paid by the landlord.

 

There are fees that landlords pay that are not passed on directly to the tenant such as gas safety certificate, repairs, renovations & insurance. The landlord chooses the best person or company for the job based on convenience, price, timescale, quality etc. This does NOT happen with agents fees as most landlords consider price to themselves, not the whole price of the agent. So, good agents who seem cheap to the landlord get the most jobs when in fact they might be by far the most expensive agent in total fees. The landlord never sees the tenant fees so these don't calculate. Now landlords will see and pay these fees too. This will be a massive positive change for tenants, high quality agents with competitive overall fees and possibly even some landlords like yourself who can pass on the cost increases.

 

Many landlords will be able to switch agency and keep very similar costs as the market will get more competitive. There is not a free market that works well when the person who makes the purchasing decision (hiring an agent) is not aware of the costs and/or knows a third party will have to pay the costs no matter what.

 

My bold=

When landlords see and have to pay these fees there will be many who will try and recoup these fees via rent increases.

Scotland is different to England....

[Hippogriff]

There are fees that landlords pay that are not passed on directly to the tenant such as gas safety certificate, repairs, renovations & insurance.

 

Oh dear. The key word being "directly", right? That is exactly what I'm saying. I've been saying the same thing again and again. Of course the Tenant pays indirectly for these things. If they did not then that would mean Landlords are, somehow, taken by surprise each year by these recurring costs (for Insurance and GSC etc.) - which they aren't... these costs are rolled-up into the business model and the Tenants pay, indirectly. What I'm saying is that they will soon be paying these fees... again, indirectly. And more.

 

Just because the transparency is removed doesn't mean the fee is removed.

 

This is all why a cap would have been sensible. The Chancellor said that it's the Landlord who can shop around, strongly implying it was cost variation that was the key issue, so a cap would have done wonders for accusations of profiteering and transparency. This simplistic approach does nothing for consistency and nothing for transparency... it's just a con job, to make people think they have been given something.

[Cyclone]

You're convinced that agents will simply switch the fee's to landlords, the evidence suggests otherwise (Scotland).

[vincentb]

A Landlord could do that... my feeling is that they wouldn't. What I am concerned about here, which hardly anyone else seem to think is a real possibility, is the real lack of transparency.

 

At least with those Agent application fees (distasteful, big up-front hit, lack of value-for-money) you are aware of what you're paying before you get into it... and you can walk away, even if it means walking away from a lovely potential home.

 

I really don't get you there. If the rent (one easy-to-understand headline figure) is the only thing payable, that makes it more transparent doesn't it, not less?