Posts with tag: letting agent fee ban

Outright Ban on Lettings Fees Branded “Dangerous Move”

Published On: October 5, 2017 at 9:36 am

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

Outright Ban on Lettings Fees Branded “Dangerous Move”

An outright ban on lettings fees charged to tenants in Wales has been branded a “dangerous move” by a landlords’ organisation.

The Welsh division of the Residential Landlords Association (RLA) has responded to the Welsh Government’s consultation on an outright ban on lettings fees charged to tenants, which follows similar moves in England.

In its consultation response, the RLA states that an outright ban, as is expected to be introduced in England, would be a dangerous move, with ripple effects throughout the sector.

With a major source of revenue eliminated, letting agents would have no choice but to pass on their overhead costs to landlords, who, in turn, would have no choice but to absorb these higher charges by raising rents for tenants, believes the RLA.

Landlords are already facing huge financial pressure at present, due to new regulatory changes to mortgage interest tax relief, Stamp Duty, mandatory licensing in Wales, and the new Energy Performance Certificate (EPC) standards, which will be introduced next spring.

The Welsh wing of the RLA is arguing that, rather than an outright ban, a capped fee should be introduced, within which a set of services would be required. These could include: referencing, credit checks, and assistance with negotiating the terms of a tenancy with the landlord.

Additionally, the RLA is advocating a set menu of fees for services that might not apply to every tenancy, such as guarantor referencing and surcharges for lost keys.

What is your opinion on an outright ban on letting agents charging fees to tenants and, if you don’t agree with the plans, what are your proposed alternatives?

We will continue to keep you updated with the development of plans for an outright ban on lettings fees, as well as helping you stick to all of the laws governing the private rental sector with our free guides: https://landlordnews.co.uk/guides/

Agents warned to streamline their processes ahead of fee ban

Published On: September 13, 2017 at 9:19 am

Author: Em Morley

Categories: Property News

Tags: fees,letting agent fee ban,letting agent fees,tenants

A new warning from automated rental payment provider PayProp states that letting agents must be fully prepared for the upcoming ban on upfront fees charged to tenants.

The firm suggests that the way to do this is by streamlining their processes.

Ban on Fees

A ban on letting agent fees charged on tenants is widely expected to be implemented throughout England at some point in 2018. A debate on the ban took place in Westminster just last week.

In Wales, there is a similar consultation ongoing. Fees have been banned in Scotland since 2012.

It is feared that the majority of letting agents will lose a significant proportion of revenue when any such ban is introduced. As part of its consultation, the Welsh Government reports that fees charged to tenants make up around 19% of an agent’s income.

A separate study undertaken by software provider Eurolink calculated that the ban could cost a single office agency £85,000. For a multi-branch network, this could rise to £850,000.

Agents warned to streamline their processes ahead of fee ban

Neil Cobbold, Chief Operating Officer of PayProp in the UK, noted: ‘It’s clear that we could soon reach a point when upfront letting agent fees charged to tenants are banned in all corners of the UK.’

‘That’s why it’s important that agents begin to plan now for how they are going to replace lost revenue – whether through alternative revenue streams, optimisation of business processes for better efficiencies, or through low-overhead growth.’[1]

Concluding, Mr Cobbold said: ‘The ban on letting agent fees is all about a changing market and effective adaptation. The agents who plan their strategy now are likely to be most successful when a ban is finally introduced.’[1]

[1] http://www.propertyreporter.co.uk/landlords/agents-must-streamline-their-processes-in-wake-of-fee-ban.html

MPs Debate Letting Agent Fee Ban in Parliament

Published On: September 7, 2017 at 8:11 am

Author: Em Morley

Categories: Property News,Tenant Fees Ban

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

Yesterday, MPs debated the proposed letting agent fee ban in Westminster Hall, Parliament.

MPs Debate Letting Agent Fee Ban in Parliament

The plan was originally confirmed in June’s Queen’s Speech, following an outlined proposal by former chancellor Phillip Hammond in November 2016.

Kevin Hollinrake, the Co-Founder of Hunters Estate Agency and MP for Thirsk and Malton, called the debate amongst MPs.

It is believed that an outright ban on letting agents charging fees to tenants will be implemented at some point over the next year.

The draft Tenants’ Fees Bill – outlined in the Queen’s Speech – also revealed plans to cap security deposits to one month’s rent.

The official consultation to the letting agent fee ban closed on 2^nd June 2017.

Many members of the lettings industry believe that letting agents will pass on higher costs to landlords in order to recoup the fees that they can no longer charge tenants.

Therefore, landlords may either put rents up for tenants – which would only damage tenants’ finances further – or self-manage their properties – which could lead to some landlords failing to carry out all of their legal obligations.

David Cox, the Chief Executive of ARLA Propertymark (the Association of Residential Letting Agents), responds to the debate: “We welcome [yesterday’s] comments from Kevin Hollinrake MP around the unintended consequences of a total ban on letting agent fees, including higher rents for tenants as landlords seek to recoup their costs. This is something ARLA Propertymark has warned against for some time. We commissioned independent economic analysis earlier this year, which showed the average tenant will see their rents increase by £103 on average per year as a consequence of a full ban.

“It’s important that the Government understands the value of the services agents carry out for both landlords and tenants when shaping its final legislation. We are therefore disappointed in the Housing Minister Alok Sharma’s comments [yesterday], declaring that the Government’s position remains that all fees will form part of the ban. As Kevin acknowledges, the ban on fees for referencing checks will cause problems. Agents are required to carry out these checks by law, and they invest both time and resources to ensure this work is carried out properly. The Government must now consider exempting referencing checks from the ban as well.”

What are your thoughts on an outright letting agent fee ban for tenants?

Government Should Enforce Lettings Fee Laws it Already has, Insists RLA

Published On: September 6, 2017 at 8:02 am

Author: Em Morley

Categories: Property News

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

Government Should Enforce Lettings Fee Laws it Already has, Insists RLA

The Government must do more to enforce the lettings fee laws it already has, which were designed to improve transparency around letting agent fees, before looking to ban them outright, insists the Residential Landlords Association (RLA).

MPs are debating plans to ban letting agents charging fees to tenants today.

Since May 2015, lettings fee laws have compelled letting agents to publish details of the fees they charge. Agents breaking this law can be fined up to £5,000.

Figures published earlier this year by the National Approved Letting Scheme (NALS) found that, after two years of the lettings fee laws coming into effect, 93% of councils had failed to issue a single financial penalty to a letting agent for breaching the rules. Only three penalty notices had been served across England for failure to display all relevant landlord and tenant fees.

Almost 60% (59%) of councils admitted that they do not consider the displaying of lettings fees to be a high priority for the allocation of resources within Trading Standards, while 45% said they only undertake reactive enforcement activity.

Instead of banning letting agents from charging fees to tenants, the RLA is calling for immediate action to better enforce the lettings fee laws that are currently in place. This includes the Government using powers it has so far failed to use to force agents to display the fees they charge in prominent positions and specify them in much greater detail.

The organisation is also calling for letting agents found guilty of breaking the transparency rules to be fined much more than they are at present. The RLA suggests that fines should be up to £30,000.

David Smith, the Policy Director of the RLA, insists: “Laws without proper enforcement serve only to let tenants and good landlords down.

“Rather than pressing ahead with plans for more legislation in the sector to ban letting agent fees at an unknown time in the future, ministers could achieve greater and earlier impact by using the powers they already have to improve transparency and introduce far tougher penalties for agents found to be breaching the law.”

He adds: “This would send a clear message that enforcing bodies will not tolerate any letting agents flouting the law.”

Rental Market Left in “Limbo” Following Queen’s Speech

Published On: June 22, 2017 at 8:17 am

Author: Em Morley

Categories: Property News

Tags: government,letting agent fee ban,letting agent fees,Queen's Speech

The rental market has been left in a state of “limbo” after yesterday’s Queen’s Speech, believes the Residential Landlords Association (RLA).

Rental Market Left in “Limbo” Following Queen’s Speech

Responding to the Government’s plans to publish a draft bill on its ban on letting agent fees charged to tenants, the Chairman of the RLA, Alan Ward, says: “A draft bill serves neither tenants nor landlords and leaves the market in a state of unhelpful limbo.”

He continues: “Rather than proceeding with draft plans that will be eclipsed by battles over Brexit, ministers could instead use powers they already have to introduce a fixed menu of fees, which letting agents would have to publish. This would enable tenants to immediately understand fee structures and enable them to more easily shop around.”

The Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, is also disappointed in yesterday’s Queen’s Speech.

He reacts: “So we reach another political juncture punctuated by excessive Autumn Statements, Budget announcements and Queen’s Speeches. The Government yet again are setting out to revitalise their approach to housing, only for us to look back come the next occasion and realise that the previous hype and hot air has evaporated with no tangible action whatsoever.”

Quirk continues: “Where housing is concerned at least, these events have become little less than soothing platitudes for the masses, akin to a Marie Antoinette-type approach. But the cake never comes. Promises to address unfair tenant fees and promote fairness, transparency and prosperity in the housing market while building more homes are worthy intentions indeed, but ones that are all too familiar yet remain unresolved.”

Responding to the Government’s plans to build the second phase of the HS2 high-speed railway line, he says: “The announcement on the HS2 railway is a significant one where the UK property market is concerned. Although it will negatively impact house prices in the path of the route itself, the areas due to benefit as destinations will see positive growth, as it opens up accessibility to more of the country in terms of commuting to major cities from more affordable areas.”

What did you think of the announcements included in the Queen’s Speech?

Poll Shows that the General Public Supports the Ban on Tenant Fees

Published On: May 4, 2017 at 8:28 am

Author: Em Morley

Categories: Property News

Tags: letting agent fee ban,letting agent fees,letting agents,tenants

A new poll by Citizens Advice shows that the general public supports the Government’s proposed ban on tenant fees charged by letting agents, while most of those in favour of the fees believe that private renters should only be required to pay a nominal amount to secure a property.

Poll Shows that the General Public Supports the Ban on Tenant Fees

The charity has found that tenant fees currently cost an average of £337 per person, but ARLA Propertymark claims that around £200 per tenant is a more realistic figure for fees relating to a range of administration, including references, credit and immigration checks, as well as the drawing up of tenancy agreements.

Yesterday, ARLA Propertymark called for tenant referencing to be exempt from the lettings fee ban.

However, the survey by Citizens Advice found that 46% of Britons think that tenants should not pay any admin fees or charges, above a tenancy deposit and first month’s rent when using a letting agent. Meanwhile, 61% supported an outright ban on tenant fees when renting property direct from a landlord.

When asked how much is too much when it comes to tenant fees, almost two thirds of respondents (61%) thought that tenants should pay no more than £50 to secure a property. This figure increases to three quarters (74%) when looking at the results for private landlords.

The findings show that many people are happy with the idea that tenants should pay a small fee to cover legitimate expenses during the tenancy application process, but less than 10% of respondents thought that tenants should have to pay more than £150 to secure a property.

Nick Marr, the Co-Founder of TheHouseShop.com, which commissioned the YouGov research, says: “Our latest YouGov survey results clearly show that there is little public support for the current system where tenants can end up paying hundreds of pounds in admin fees to secure a new property.

“In fact, the majority of people said that tenants should pay a minimal fee of no more than £50.”

He believes that there is plenty of evidence to show that a growing number of tenants are actively seeking out private landlords in an attempt to “avoid the hefty fees charged by some letting agents”.

He adds: “Many tenants are prepared to pay a small fee for legitimate expenses involved in securing a property, such as a professional reference check, as this has become common practice even among private landlords – but vague and undefined admin charges that can total hundreds of pounds are tough to defend in the current market.”