Letting Agents Fees to Be Banned. Thoughts?

[Hippogriff 10]

It feels like you're missing the point deliberately, just to have an argument about something you, probably, have no real-world interest in.

 

I do put the rents up regularly... I don't just put them up as and when I might feel like it... if you put them up annually, by modest amounts, then you're really limited to that one time per year, you don't just say "oh, I'll put them up again now". What I have been clearly talking about is new tenancies, did you miss that?

 

I have no property on the market right now.

 

If and when I do, and the new laws are in place and the Agent I work with wants to charge me more for Tenant Find, then (and only then) the rent will be artificially higher than it would have been, and we'll see what happens. I've always said that - time will tell. The property will sink or swim. I'm open to whatever will happen. I have just been saying I think Tenants will lose-out in the long run. It's still my view.

 

You seem convinced (for some reason I can't fathom) that you can predict the future perfectly... whereas I am at least doing some predicting, but also hedging my bets.

 

---------- Post added 07-12-2016 at 09:16 ----------

 

I think (and I can stand corrected here) that around 75% to 80% of Landlords in the UK have 1 property let out.

 

Usually their previous home.

 

That is not the definition of purchasing power in my mind. Yes, the choice of which Agent, or indeed any Agent, to use lies with the Landlord, I accept that, but it's not like a Landlord with 1 property is going to walk into an Agent like the big I Am and say - "I demand a hefty discount for your services, I want to exercise my purchasing power"... let's get real.

[Cyclone 10]

I was a landlord until a year ago, I could see which way things were going, so I sold up and exited the market.

 

Not sure about me missing the point, you're claiming that despite how the exact same change played out in Scotland, here it will be different.

And to support that, you say you won't switch agents to save fee's, you WILL put up prices to recoup the increased charges to yourself (which you've decided will exist), and that the market will take this increase in the cost to the tenant.

I'm simply suggesting that other landlords won't accept a price increase, they will change agents, your increased prices will be uncompetitive. And that's why you will change agents.

 

We're both predicting the future, that's how you make plans. My predictions are based on the example of Scotland and economic theory. I'm not claiming that I'm 100% right or I have some special power to predict the future, but I am trying to provide reasoning for the prediction. You're just saying "it will be like this" without explanation.

 

The landlord has the choice of agents, the tenant didn't. No purchasing power with the tenant, if they wanted a given house, they had to suck up the costs (which were often hidden and obfuscated until they were already in the process). The landlord on the other hand can go to any agent or even manage the property themselves.

[Hippogriff 10]

I was a landlord until a year ago, I could see which way things were going, so I sold up and exited the market.

 

You love to argue about things you aren't involved in, I get it. Carry on...

[Cyclone 10]

I'm quite happy to disagree with you, I've set out my reasoning, I don't have to convince you that it's right. Time will tell.

[Jeffrey Shaw 90]

Even if L does increase rent to cover such costs, only the successful T will pay the extra.

Advantage: the unsuccessful applicants won't have to pay. They do at present often seek a property, pay the fees, fail to be successful, seek another property, and on and on...

[Hippogriff 10]

I read on Upad, just today, that the ban on Letting Agent fees won't come in until "at least 2018"... so time will tell, but it might be a long time until it's telling.

 

I had thought it'd be April 2017...

[marcd 10]

If the Agent passes fees onto you, perhaps what will actually happen is:

 

1. You'll ask for a reasonable breakdown of those fees

2. Realise they are charging you £100 for an inventory, £30 to phone a referee or read a letter, £30 to print off a template agreement then a sneaky 'admin' charge etc...

3. Decide those figures aren't reasonable

4. Ask for reasonable fees or do it yourself

 

Tenants have no say in this, they're held to ransom literally!

 

There's a good chance that your agent will advise you to keep your rent the same; why? Because their PROFITEERING doesn't factor into the market rate, it's just their cream on the top. The fact that you're quite happy with the Agent fleecing potential tenants says a lot about yourself.

 

Also seems by your own logic, if you did this yourself you could reduce the rent by a pretty hefty amount too. Is this the problem with landlords these days, born lazy?

 

Anyway it's a great change and can't come in soon enough, as Mr Shaw mentioned, unsuccessful applicants will no longer be short of money.

[Cyclone 10]

Those are exactly the sort of fee's that agents charge. In addition to an upfront fee for the candidate before they'll start the process and an excessive charge for a credit check.

 

I had another thought though. You said several times that I'm not in the game (as if that invalidates my opinion), I thought of a group of people who agree with me though. The government. They're the ones making this the law, and they're doing so because they think it will benefit tenants. And I'm sure they've considered the arguments you've put forward. So it's not like I've just made my opinion in a vacuum having never let a house in my life, my opinion is the same as the government opinion.

[Hippogriff 10]

Aye, very populist and headline-grabbing but also very misguided as to long-term effects.

 

Typical government, right?

[sgtkate 10]

People saying the costs will be passed on the landlords who will increase the rent...do you actually know how much it costs for full background checks? £25. That's it. Even if you spend 2 hours obtaining the paperwork and placing ads then maximum cost per tenant is looking at £100. If tenant changes every 6 months (short rental period and highly unlikely) you'd be looking at £200 a year of admin costs or £17 a month.

 

Can you honestly say a tenant wouldn't rather pay £17 a month max extra than £1000 upfront for literally 2 hours work?

[Hippogriff 10]

No, what you're assuming is that the work is passed onto the Landlord. What we're assuming is that the costs (the fee the Letting Agent would charge a Tenant) may be passed onto the Landlord.

 

They're completely different scenarios and the fact that a reference check costs £25 is largely irrelevant.

[sgtkate 10]

If you're asked to pay more, change agent. There will be a new, hungry agent who is willing to take the £300 hit to have every landlord within 10 miles switching to his business.

And that will cause the existing landlords to stop trying to hike prices.

 

Landlords have purchasing power, tenants never did.

 

This is absolutely right cyclone. Tenants have no choice over agent. Only way it could be more tenant friendly is to allow the tenant to choose an agent who works on their behalf rather than the landlord but that is clearly never going to happen.

 

---------- Post added 08-12-2016 at 11:11 ----------

 

No, what you're assuming is that the work is passed onto the Landlord. What we're assuming is that the costs (the fee the Letting Agent would charge a Tenant) may be passed onto the Landlord.

 

They're completely different scenarios and the fact that a reference check costs £25 is largely irrelevant.

 

No they aren't. If the landlord is now faced with a £500 bill for something they can do themselves then they will move their business elsewhere to a cheaper agent or they will do it themselves. I think it's you who is missing basic business rules here. This ruling forces agents to be more competitive in their fees to landlords in a way they never had to be with tenants.

 

What is your proposal to deal with it? I despise agents. They rip you off as both a tenant and landlord and I've been both. I'd be up for any better solution but I don't see one.

Edited December 8, 2016 by sgtkate