Posts with tag: letting agent fees

Letting Agent Fees to be Banned in Autumn Statement

Published On: November 23, 2016 at 11:24 am

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It is now widely expected that Chancellor Philip Hammond is to announce a ban on letting agent fees charged to tenants in today’s Autumn Statement.

Presently, tenants can be charged substantial fees for a number of administration tasks, such as conducting reference and Right to Rent checks.

Ban on letting agent fees

Mr Hammond believes that by shifting these costs to landlords, 4.3 million households could save hundreds of pounds.

He also feels that this move could increase competition amongst landlords, who can now search around for the cheapest agent.

However, the move has not gone down well within the industry.

Richard Lambert, Chief Executive Officer at the National Landlords Association, said: ‘The new Chancellor is clearly aware of the pressures facing those living in the private-rented sector, but in attempting to improve affordability he has shown that, like his predecessor, he lacks an understanding of how the whole sector works.’[1]

‘There’s no doubt that some unscrupulous agents have got away with excessive fees and double-charging landlords and tenants for far too long.  Banning letting agent fees will be welcomed by private tenants, at least in the short-term, because they won’t realise that it will boomerang back on them.’[1

Mr Lambert feels that as a result of the changes, ‘Agents will have no other option than to shift the fees on to landlords, which many will argue is more appropriate, since the landlord employs the agent.  But adding to landlords’ costs, on top of restricting their ability to deduct their business costs from their taxable income, will only push more towards increasing rents.’[1]

Letting Agent Fees to be Banned in Autumn Statement

Letting Agent Fees to be Banned in Autumn Statement

Increased costs for landlords

Richard Price, Executive Director at the UK Association of Letting Agents commented: ‘Arbitrary bans sound appealing as a quick fix, but the problem of affordability in the private-rented sector cannot be addressed by preventing legitimate businesses from charging for their services.’[1

‘A ban on agent fees may prevent tenants from receiving a bill at the start of the tenancy, but the unavoidable outcome will be an increase in the proportion of costs which will be met by landlords, which in turn will be passed on to tenants through higher rents,’ he continued.[1]

David Cox, Managing Director of the Association of Residential Letting Agents, described the ban on letting agent fees as a, ‘draconian measure,’ which will have, ‘a profoundly negative impact on the rental market.’[2]

‘It will be the forth assault on the sector in just over a year and do little to help cash-poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account. Most letting agents do not profit from fees.’[2]

Welcome

However, Campbell Robb, chief executive of Shelter, observed that: ‘Millions of renters in England have felt the financial strain of unfair letting agent fees for far too long, so we are delighted with the Government’s decision to ban them. We have long been campaigning on this issue and it is great to see that the Government has taken note.’[2]

[1] http://www.landlords.org.uk/news-campaigns/news/hammonds-rental-boomerang-industry-bodies-respond-ban-on-letting-fees

[2] http://www.bbc.co.uk/news/business-38065249

 

Renters’ Rights Bill to be debated tomorrow

Published On: November 17, 2016 at 10:59 am

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Fees able to be charged by letting agents will be discussed tomorrow in the House of Lords, as the Renters’ Rights Bill takes stage in the upper house.

The proposal was put forwards as a Private Members Bill by Liberal Democrat peer Baroness Grender, but is unlikely to become law outright. However, Private Members’ Bills have a record of highlighting features that are later put into legislation.

Scrapping of fees

Grender’s measure outlines the scrapping of agents’ fees for tenants. It calls for an amendment to the Landlord and Tenant Act 1985, to stop agents in England by charging both existing tenants or prospective tenants.

She calls for no charges to tenants for registering, administration, inventories or reference checks, alongside free renewal or exit fees.

In addition, Baroness Grender has called for the mandatory registration of landlords and caps of the size of deposits. What’s more, the proposals request an automatic ban for any agent or landlord named on a ‘rogue operator’ database from being given a HMO licence.

Renters' Rights Bill to be debated tomorrow

Renters’ Rights Bill to be debated tomorrow

Support

Last time the measure was debated in the House of Lords, it received substantial all-party backing. At this debate in June, Baroness Grender told the Lords that consumer protection for private sector tenants was less developed than in other commercial activities.

Grender observed that renters are, ‘often at the mercy of landlords and lettings agents.’[1]

‘It’s time for the Government intervention to address this imbalance of power and build up the consumer rights of renters….Letting agents should not be able to get away with double charging fees, imposing them on both tenants and landlords, when in fact it is only the landlord that is the client,’ she added.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/11/letting-agents-fees-to-be-discussed-in-house-of-lords-tomorrow

 

Letting Agents Profiting from Spiralling Fees, Believes Student Tenant Site

Published On: November 15, 2016 at 9:31 am

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Letting agents are profiting from charging spiralling fees for “no extra work”, believes a student tenant website.

A study by StudentTenant.com – a free-to-list student lettings platform – highlights the extent to which letting agents are profiting from higher rent prices.

Their “antiquated model” of charging a high commission to let a property still allows them to pocket sky-high fees, without conducting extra work, insists the organisation.

Letting Agents Profiting from Spiralling Fees, Believes Student Tenant Site

Letting Agents Profiting from Spiralling Fees, Believes Student Tenant Site

In the last 12 months, rent prices have risen to an average of £901 per month – up by 3%, which is higher than the current rate of inflation.

The lowest rents can be found in the North East of England, at an average of £530 a month. However, in London and the South East, it’s a completely different story…

The cheapest London borough for private tenants is Croydon, where the average rent is £1,170 per month. In Westminster, this rises to a huge £2,241.

Although the problem is considerably worse further south, rent rises have been felt across the country.

The UK’s greatest increase over the past year was in Lambeth, where rents rose by 12% to reach £2,874.

Only one part of the UK, Scotland, has seen a decrease in rents over the past year.

Some London boroughs have experienced rent declines, however, with Haringey seeing the greatest fall, of 6.4%. Prices are also down in Brent, Bromley, Kingston and Chelsea.

With the majority of regions and London boroughs seeing rent price growth, letting agents will also have experienced a bump in their earnings, StudentTenant.com points out.

The firm’s research puts the average letting agent fee at 12.7% of the total rent for the year, meaning the typical fee across the UK is over £1,300. In the South East, it’s more than £1,500, while those in Westminster charge a whopping £3,415.

Following a bumper rent price rise, letting agents in Lambeth can now charge £345 more than at this time last year.

But is this justified, asks the group.

“It’s really hard to justify the amount that a typical high street letting agent charges in the first place, let alone above inflation increases in most parts of the country,” insists its Managing Director, Danielle Cullen. “There’s a significant shortage of good rental stock, which means higher rents and yields, which can be great news for landlords, but not so great for tenants.”

She adds: “But when much of that gain is eroded by greedy agents taking a fatter and fatter chunk of it, 12.7% of what would otherwise be the landlord’s income in effect, then buy-to-let investors might want to think twice about resorting to an old fashioned high street-based rental firm.”

In order to protect tenants from spiralling fees, Citizens Advice has called on landlords to cover letting agent costs. Do you think this is a good idea? And would this deter you even more from using a high street service?

National Approved Letting Scheme calls for cap on agent fees

Published On: September 22, 2016 at 8:51 am

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Categories: Property News

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The National Approved Letting Scheme has today called for a cap on letting agent fees charged to tenants, as opposed to a widespread ban.

This organisation represents both letting and management agents and feels that a cap on fees is the most appropriate way of preventing excessive fees, currently charged by a small minority.

Action

Isobel Thomson, Chief Executive of The National Approved Letting Scheme, believes it is time for the industry to take action, before the chance of an outright ban becomes a viable option for the Government.

The Renters’ Rights Bill is steadily making its way through Parliament. This Bill proposes an outright ban of fees charged to tenant and has already received two unopposed readings in the House of Lords.

Earlier on this year, a petition against these fees received media coverage. This petition, entitled, ‘Make Renting Fair in England’ has received over 250,000 signatures.

National Approved Letting Scheme calls for cap on agent fees

National Approved Letting Scheme calls for cap on agent fees

Fees

Thomson believes that efforts to explain to the Government on why upfront fees are necessary are often, ‘hampered by sensationalist headlines.’

‘We believe a cap is an appropriate way of curbing any excessive fees and offering protection to the consumer. By offering a cap calculated and enforced at a local level, we still allow agents to be paid for the work they do in setting up a tenancy, while also ensuring a fair, set rate for tenants,’ she observed.[1]

She went on to call on all industry bodies to join forces to come up with a, ‘proper solution to an all out ban.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/9/nals-calls-for-cap-instead-of-ban-on-letting-agent-fees

 

Landlords, Save Up to £1,600 a Year with New Digital Management Agency

Published On: September 2, 2016 at 9:16 am

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Landlords, did you know that a new digital management agency has now launched, which will help you save up to £1,600 a year in fees?

NoAgent.co.uk uses technology to automate the marketing, administration and maintenance of its rental properties, as well as supplying 24/7 support from experienced property professionals.

So how does the new management agency work?

Free marketing

No Agent offers free advertising on the UK’s major property portals (Rightmove, Zoopla, etc.), granting access to a much wider audience without using local letting agents.

No extra fees

A simple fee structure means that landlords are charged just £39 per month for London properties and £29 a month outside of the capital. Landlords and tenants face no additional fees. Furthermore, landlords aren’t tied into a long-term contract and can cancel at any time.

Landlords, Save Up to £1,600 a Year with New Digital Management Agency

Landlords, Save Up to £1,600 a Year with New Digital Management Agency

No paperwork 

Landlords can manage their properties using a real-time dashboard. All administration is handled online or through No Agent’s 24-hour call centre, including viewings, reference and credit checks, contracts, check-in, compliance reminders, maintenance and deposit/rent collection.

Tenants can also use the online system to organise viewings and manage application documents, while also avoiding additional agency fees.

Easy payments

No Agent has introduced direct debit payments, allowing landlords to switch from using standing orders.

Expert advice

Landlords will have instant access to property managers, with an average of five years’ experience, and a legal helpline.

The firm has also announced that veteran property technologist Gillian Kent has joined as Chairman. Her previous roles include CEO of Propertyfinder.com, which was sold to Zoopla in 2009 and integrated into its platform, and Managing Director of MSN UK.

Kent says: “Despite the impact of the digital revolution, property services haven’t fundamentally changed. No Agent is the only service that completely automates a range of essential tasks, such as marketing, bookings, reference checks, maintenance and compliance.

“Strategically, what we’re doing is empowering landlords to fully manage all aspects of the letting of their property, and save money as a direct result. Agencies currently earn £115m a year in fees for doing these sorts of tasks.”

By using technology throughout the lettings process, No Agent can offer industry-leading prices and access to round-the-clock support. This process saves money, time and increases transparency.

“The average monthly rent outside of London is now £779,” Kent points out. “So when you add on standard agency charges like a month’s rent, together with monthly management fees of up to 15%, the first year cost for a landlord is close to £2,000.”

She continues: “By contrast, using No Agent would save them just shy of £1,600. Tenants will also be better off, as we don’t charge for services like drawing up tenancy agreements and credit checks. However, letting agencies now typically charge tenants £337 in fees – many in London are forced to pay over £400.”

Government Survey Confirms the Need for Letting Agent Fee Ban

Published On: August 23, 2016 at 10:45 am

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Categories: Landlord News,Tenant Fees Ban

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A survey by the Government has confirmed the need for a letting agent fee ban, according to tenant lobby group Generation Rent.

The organisation has called on the Government to ban letting agent fees for tenants, after the Government’s own survey estimates that the cost is discouraging half a million renters from moving out of inadequate housing.

Government Survey Confirms the Need for Letting Agent Fee Ban

Government Survey Confirms the Need for Letting Agent Fee Ban

The Government’s latest English Housing Survey, published on 21st July, found that 34% of private tenants who lived in unsatisfactory homes said that letting agent fees cost too much and would stop them from moving to another property.

A further 35% said that they would have to think about whether they could afford to move out if they were charged fees. Together, this equates to 502,000 households.

The same study found that the average cost of letting agent fees is £223, while 40% of private tenants paid a fee when they moved into their current home. To make matters worse, 30% of renters have lived in their home for less than a year.

Based on a renting population of 4.3m households, the research suggests that letting agent fees cost tenants around £115m per year.

However, Generation Rent believes that this is an underestimate. The campaign’s volunteers are conducting their own research into letting agent fees, which has already found that 800 agents across 12 local council areas are charging the typical two-adult household an average of £398 in upfront fees.

The campaign to ban letting agent fees is already gathering momentum. A petition organised by The Debrief website has amassed more than 250,000 signatures, while an early day motion in Parliament has attracted signatures from MPs on both sides of the House.

Additionally, Liberal Democrat peer Baroness Grender has introduced a private member’s bill, the Renters’ Rights Bill, in the House of Lords, which would ban fees for tenants. Peers are expected to debate the bill at committee stage later in the year.

The Director of Generation Rent, Betsy Dillner, says: “If a customer is getting bad service, they’re normally able to take their business elsewhere, but in our broken housing market, unhappy tenants are stuck because it costs so much to move. As a result, bad landlords get away with neglecting their properties.

“Letting fees are already perverse – agents charge inflated fees to tenants who aren’t even their customers. Landlords should be paying agents’ costs instead. And on top of that, tenant fees create a distorted market that isn’t responsive to the consumer’s needs.”

Do you agree with the plan to ban letting agent fees for tenants?