Written By Em

Em Morley

4,000 agents could lose jobs following ban on fees

Published On: March 28, 2017 at 10:08 am

Tags: ARLA,fees,letting agents,tenancy agreements,tenants

New research released by ARLA Propertymark suggests that there are 4,000 jobs at risk, should the proposed ban on agent fees come into force.

In a report presented to the organisation’s annual conference, ARLA said that the ban could cost tenants thousands of pounds.

Funds

The research reveals letting agent fees make up around one fifth of letting agent revenues and provide vital funding for imperative checks required to set up tenancy agreements.

Should fees be banned outright when the Government publishes its consultation, agents will be left with little choice but to pass the cost onto landlords in the form of higher agent fees.

ARLA’s research suggests that 41% of landlords expect that they will have to pass on some of this inflated cost to their tenants. On average, these rises will amount to £103 per year.

If landlords were to pass on the entire uplift in letting agent fees, tenants would be hit more, with typical rises of £275 per year.

In addition, there would be a huge impact on the lettings sector overall, which employs roughly 58,000 across the country.

4,000 agents could lose jobs following ban on fees

Risks

The report states: ‘If letting agents take the full hit of the letting agent fee ban, 16,000 jobs will be at risk. It’s more likely however agents will pass on 75 per cent of the costs to landlords, which would result in job losses of around 4,000.’[1]

More side effects from the proposed ban include 27% of landlords choosing not to purchase any more rental properties. 20% meanwhile said that they would sell some of their portfolio.

ARLA’s report shows that in Scotland, letting agent fees were banned in 1984 and clarified in the Private Rented Housing Act of 2011.

The report goes on to say: ‘This meant that tenants were only accountable for the rent and deposit, and everything else would be charged to the landlord. However, this has resulted in many agents carrying out less of the tasks they were doing previously. Worryingly, one in four said they no longer do credit checks as standard.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/3/4-000-letting-agency-jobs-at-risk-if-fees-ban-happens-warns-arla

Void periods could rise if ban on fees goes ahead

Published On: March 28, 2017 at 8:55 am

Author: Em Morley

Categories: Landlord News

Tags: ban on fees,insurance,letting agent fees,void periods

Alterations to letting agent fees could well lead to higher rents and greater repossessions, as a result of lesser quality of tenant referencing in the private rental sector.

Insurance provider Endsleigh has raised the concerns, also highlighting fears that if letting agents are banned from charging fees to tenants, the quality of referencing could fall. This is due to agents potentially sourcing cheaper referencing alternatives to offset any future losses of income.

Fees

Presently, tenants can be charged fees for a number of administration tasks, including reference, credit and immigration checks. This however looks likely to change as the ban on agent fees comes into force soon.

It is now four months since the ban on fees was proposed by Chancellor Phillip Hammond in the Autumn Statement. Endsleigh fears that this proposal has created confusion in the private rental sector.

David Hadden, head of Endsleigh Let, noted: ‘The private rental sector is currently in limbo waiting for further details on the fee ban but the topic appears to have fallen off the agenda, causing confusion for both letting agents and tenants.’[1]

‘As a partner to the sector, we’re keen for this discussion to move forward so that the letting industry can properly assess and address the likely impacts of these changes,’ he continued.[1]

Void periods could rise if ban on fees goes ahead

Impacts

Both referencing and insurance are two areas likely to be impacted upon by the changes, according to Hadden. However, he acknowledges that the scale of this is unclear as the Government decides how best to press ahead with the ban.

Continuing, Mr Hadden said: ‘Our letting customers have told us how concerned they are about these changes and what it means for the private rental sector.’[1]

‘Poor quality referencing could lead to higher eviction numbers and longer void periods. This, in turn, could affect connected insurances such as rent guarantee, with the likelihood of claims to be perceived as increasing, premiums would surely follow suit,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/tenant-fees-ban-could-leave-landlords-facing-lengthy-void-periods

Letting Agent Fee Campaign Enters Second Stage

Published On: March 28, 2017 at 8:47 am

Author: Em Morley

Categories: Property News

Tags: letting agent fee ban,letting agent fees,letting agents,lettings law

Letting Agent Fee Campaign Enters Second Stage

Around 180 letting agents in parts of Berkshire and Hampshire are being targeted as part of a letting agent fee campaign to find out if agents are displaying their fees correctly.

It is the second stage of the letting agent fee campaign being jointly conducted by The Property Ombudsman (TPO) and the Chartered Trading Standards Institute. As of yesterday, 179 letting agents in and around Basingstoke and Reading are being targeted.

They are being asked to provide photographic evidence of their compliance with the law, which requires fees to be displayed in the branch and on the company’s website.

The second stage follows on from the end of the first phase, where 99% of 266 TPO letting agents in Swansea and Dorset were found to be compliant.

All had been asked for similar photographic evidence.

Agents found to be displaying the required information incorrectly were given the chance to amend it and re-submit their evidence.

The campaign found that just two agents failed to comply, either by not responding or not addressing inaccuracies that had been flagged up.

Both will now be referred to TPO’s disciplinary and standards committee for further investigation.

This committee is independent, and has the power to fine, suspend or expel an agent from TPO, plus refer it to Trading Standards officers, who can impose fines of up to £4,000.

Letting agents are required to display fees, along with their redress scheme membership details and Client Money Protection (CMP) scheme.

The Property Ombudsman, Katrine Sporle, says: “TPO has seen an increase in the number of enquiries about fees from tenants in recent weeks. It is essential that agents provide clarity and transparency about what fees are being charged for what service, so that all parties understand the commitments they are entering into.”

The campaign will continue while details of a consultation on the letting agent fee ban have yet to be announced.

Letting agents, make sure you comply with the law!

Has your London Property gone up in Value?

Published On: March 28, 2017 at 8:16 am

Author: Em Morley

Categories: Property News

Tags: house prices,London,London property market,valuation

Our friends at Portico have launched an instant valuation tool that will tell how much your property is worth in just 60 seconds!

Has your Property gone up in Value?

Not only will the calculator tell you the correct rental price or value of your property, it’ll also tell you how much you stand to make on Airbnb, the short-term let website.

Click here to find out the current value of your home for sales, rental or Airbnb.

Londoners in their thousands are turning to Airbnb as a way to generate extra income. And despite the 90-day limit, even seasoned landlords are coming round to the fact that a combination of Airbnb and traditional tenancies will maximise their return on investment.

Portico has recently launched a premium Airbnb management service, named Portico Host, so all you need to do is tell them when you want to rent out your property and they’ll do the rest.

Find out more about their service here: https://www.portico.com/blog/our-news/airbnb-management-portico-host

If after finding out the value of your home you would like to sell or let your property with us – or if you’d like to give Airbnb a go – please give Portico a call on 0207 099 4000.

Wales sees largest rental growth in the UK

Published On: March 27, 2017 at 10:19 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,rental yields,rents,rising rents,Wales

Rents throughout England and Wales increased in all bar two of the eight regions analysed by the latest Your Move England & Wales Buy to Let Index during February

This was led by increases in Wales, where rents grew by an average of 7.7% year-on-year to February to hit £593 per month. Despite this, Wales remains one of the cheapest places to rent.

Rental Costs

The North East and Yorkshire and the Humber were found to be the only regions in the report with cheaper rents than Wales, with average rents of £545pcm and £566pcm respectively.

In terms of rental growth, the East and South East of England led the way, with rents in these regions rising by 5.6% and 3.4%. Average rents in the East of England currently stand at £868 per month, while in the South, this figure rises slightly to £878pcm.

Valerie Bannister, Letting Director at Your Move, said: ‘Areas in the South East and East of England have traditionally offered much better value than the capital and this has tempted many Londoners to look further afield for rental properties.’[1]

Capital Pains

In London, rents continued to fall, with the city the only region surveyed to see rents slide both month-on-month and year-on-year.

The average rental property in London was let for £1,280pcm in February 2017-1% lower than at the same period one year ago.

Continuing, Bannister noted: ‘The dramatic rent increases in London have now slowed as people look outside the capital in order to meet their housing aspirations. Renters in London could be reaching the limits of their affordability as prices dropped back 1% in the last year. This will be one to watch as the year progresses.’[1]

Wales sees largest rental growth in the UK

Falls

London was not the only region to see rents slip year-on-year. In the South West prices fell by 1.5% in the last 12 months to reach £662pcm.

Taking England and Wales as a whole, the average rent stood at £798 in February. This was the same as in January, but was down from the £811 seen at the end of 2016.

In terms of yields, the report found that the average was 4.1% in February. This is down on the 4.9% seen at the same period last year.

Unsurprisingly, places with higher house prices command the smallest yields. It is not a surprise then to see that the average yield in London was only 3.2%, lower than in any other part of the country.

On the other hand, properties in the North East saw the largest yields, returning an average of 5.3% in the last month.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/wales-sees-rents-rise-faster-than-anywhere-else-in-the-uk

Rogue Landlords Hit with £18,000 Fines for Letting Hazardous Property

Published On: March 27, 2017 at 10:03 am

Author: Em Morley

Categories: Landlord News

Tags: Health and safety,rental property,rogue landlords

Three rogue landlords have been ordered to pay fines and costs totalling £18,000 for letting a hazardous property in High Wycombe, which had faulty electrics and a lack of fire protection.

Rogue Landlords Hit with £18,000 Fines for Letting Hazardous Property

Noshiba Rehman, Saiqa Bi and Ansar Rehman have been fined for letting the hazardous property in Eaton Avenue, High Wycombe, which posed “significant” fire risks to the tenants, according to officers from Wycombe District Council, who inspected the property in July last year.

The officers found that the tenants were at risk of electrocution at the property, suggesting that there had been “no inspection of the electrical installation for at least five years”.

There was also only one battery-operated smoke detector in the property, no light in the stairwell, while the front door, which had broken glass, was patched up with tape and plywood with a hole next to the lock, making it insecure and offering tenants “no protection against intruders”.

The defendants, who did not attend court, pleaded guilty to all charges and were collectively ordered to pay £18,000.

The fines and costs imposed were as follows:

Noshiba Rehman – Fine of £5,500 in total, victim surcharge of £50 and legal costs of £850.

Saiqa Bi – Fine of £5,000 in total, victim surcharge of £50 and legal costs of £750.

Ansar Rehman – Fine of £5,000 in total, victim surcharge of £50 and legal costs of £750.

Councillor Tony Lee, the Deputy Cabinet Member for Housing at Wycombe District Council, comments on the hazardous property case: “We are determined to clamp down hard on rogue landlords like this. They are callously and consciously exploiting vulnerable people and, in this case, receiving taxpayers’ money through housing benefit paying for rent.

“Sometimes it’s difficult for tenants to stand up to landlords, but we will. Our teams are expert and determined to stop this kind of exploitation happening in Wycombe District. Let this set an example to those landlords who think they will get away with it.”