Posts with tag: lettings fees

Outright Ban on Lettings Fees Branded “Dangerous Move”

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


Categories: Landlord News

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Outright Ban on Lettings Fees Branded "Dangerous Move"

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:

MPs Debate Letting Agent Fee Ban in Parliament

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


Categories: Property News,Tenant Fees Ban

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

MPs Debate Letting Agent Fee Ban in 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 2nd 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


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

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.”


Tenant Referencing Must be Exempt from Lettings Fee Ban, Insists ARLA

Published On: May 3, 2017 at 9:32 am


Categories: Landlord News

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ARLA Propertymark insists that tenant referencing must be exempt from the Government’s planned lettings fee ban.

Tenant Referencing Must be Exempt from Lettings Fee Ban, Insists ARLA

Tenant Referencing Must be Exempt from Lettings Fee Ban, Insists ARLA

In a message to member agents yesterday, the organisation’s Chief Executive, David Cox, urged: “Tenant referencing must be exempt from the ban. The reasons for this are manifold. Referencing ensures that tenants do not take on financial commitment which is unsustainable. Referencing reduces the risk of tenants falling into rent arrears, which often results in them being evicted and subject to County Court Judgements.

“This can lead to a drop in credit rating and difficulty sourcing other rental properties or making successful mortgage applications, along with difficulty sourcing low-cost credit from mainstream suppliers.”

He continued: “Quality referencing helps to reduce homelessness.

“While it is frequently said that referencing is available for a few pounds, this is not accurate. Our primary research has shown that agents list referencing as one of the single most time-consuming aspects of the role.

“Referencing is not simply a case of sending a form to a third part; it is frequently a complex process which is in part required by law (Right to Rent checks).”

Cox explained: “Referencing involves ensuring forms are completed properly, making requests to referees and guarantors, checking a tenant’s credit history, liaising with an external referencing company, collecting employment evidence and information from previous landlords, checking passports or other documentation, storing copies securely, and scheduling and carrying out follow-up checks where legally required.”

ARLA Propertymark’s research shows that letting agents take an average of eight hours to complete tenant referencing checks.

The organisation is continuing to press for an extension or suspension of the Government consultation into the proposed lettings fee ban.

It is inviting its members to give their input into the consultation response that will be submitted.

On Friday, during an interview on BBC Radio 4’s Today programme, the Housing Minister, Gavin Barwell, made it clear that the ban would go ahead.

Housing Minister Expresses Support for Letting Agent Fee Ban

Published On: December 16, 2016 at 11:47 am


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The Housing Minister, Gavin Barwell, has expressed his support for the forthcoming letting agent fee ban, which was announced during the Autumn Statement.

During a debate in the House of Commons on homelessness, MPs expressed concerns over the high cost of renting.

Barwell, who called homelessness a “moral stain”, said the Government is attempting to “deal with the up-front cost of accessing the private rented sector”.

Housing Minister Expresses Support for Letting Agent Fee Ban

Housing Minister Expresses Support for Letting Agent Fee Ban

He continued: “In terms of dealing with statutory homelessness, access to the private rented sector is key. That is why the Chancellor’s announcement in the Autumn Statement about letting agent fees – I am sure the opposition welcome that announcement – is an important step.”

However, back in September this year, he rejected the idea of a letting agent fee ban, saying it was a bad idea: “Landlords would pass costs to tenants via rent. We’re looking at other ways to cut upfront costs and raise standards.”

The Shadow Secretary of State for Housing, John Healey, who was the last housing minister under Labour, moved this week’s debate.

He pointed out that a record number of homeless people are now sleeping rough, and over 10,000 children will spend Christmas Day in temporary accommodation. Remember that if you want to help fight homelessness, you can join in Just Landlords’ Christmas competition in association with Shelter:

Healey said there was a lack of action to help private tenants, “while eviction or default from a private tenancy is now the biggest single cause of homelessness”.

During the debate, the private rental sector was repeatedly mentioned.

The Conservative MP for Colchester, Will Quince, believes the private rental sector is part of the problem: “We know that the largest cause of homelessness is the ending of a tenancy, largely via a section 21 notice.

“The system – whereby an individual comes to their council for assistance at the earliest possible opportunity when they get into trouble, and the council turns them away and says: ‘Come back when the bailiffs are knocking on your door’, at which point, the person has arrears and a County Court Judgement against their name, and will never again be able to rent in the private rented sector – is failing those individuals and it has to stop.”

Quince insists that the Government should introduce Help to Rent schemes, similar to its Help to Buy initiatives.

The former shadow housing minister, Jack Dromey, spoke of a “rapidly growing private rented sector, characterised by soaring rents, with the average tenant paying £2,000 more over the past five years, insecurity, and often poor accommodation.”

Conservative MP Bob Blackman also called for a national scheme where prospective tenants could get deposits, while the Shadow Housing Minister, Andy Slaughter, said the Government has a “responsibility” to legislate for longer tenancies and rent controls.

What do you think of the proposed measures, particularly the letting agent fee ban?

Landlords and Agents Should Get Behind Fee Cap Plan, Insists AIIC

Published On: December 15, 2016 at 9:33 am


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Landlords and letting agents should get behind a proposed fee cap plan, insists the Association of Independent Inventory Clerks (AIIC).

Following the announcement in the Autumn Statement that letting agents in England will no longer be able to charge fees to tenants, the AIIC urges all landlords and agents to come together to campaign for a fee cap rather than an outright ban.

Many industry experts believe that banning fees will only push rents up, as agents will simply pass the additional costs onto landlords.

Landlords and Agents Should Get Behind Fee Cap Plan, Insists AIIC

Landlords and Agents Should Get Behind Fee Cap Plan, Insists AIIC

Research recently compiled by Spicerhaart predicts that tenants paying a monthly rent of £1,000 could end up being charged an additional £900 over the course of an average tenancy if landlords put rents up by just 3%.

The Fair Fees Forum has been created to bring landlords and letting agents together to campaign for a fee cap.

Lead by the National Approved Letting Scheme (NALS), the Fair Fees Forum is seeking to have an active role in the Government’s consultation on the lettings fee ban, as well as organising a meeting with the Housing Minister, Gavin Barwell.

The AIIC agrees that a fee cap would be a fairer way of limiting agents’ fees charged to tenants.

“We’re obviously extremely disappointed with the outcome of the recent Autumn Statement, especially at a time when the rental sector has come under such frequent attack from the Government,” says Patricia Barber, the Chair of the AIIC.

“However, now is not the time to feel sorry for ourselves and shy away; we must stand up, be counted and engage in constructive dialogue with the stakeholders that matter.”

Barber praises the work being conducted by the Fair Fees Forum, and is urging all landlords and letting agents to be as vocal and engaged as possible.

It is expected that a ban on fees will be introduced within the next 12-18 months, following a Government consultation period in the New Year.

Barber explains: “The next few weeks and months are set to be an extremely crucial period in the make up of this proposed ban.

“Rather than complaining about what we consider to be a gross injustice, it will be far more productive if the industry clubs together to explain possible solutions to this problem, the benefits of a cap and possible implications of a blanket ban.”

She adds: “Here at the AIIC, we find it hard to understand why tenants should be serviced with hours of letting agents’ time while benefitting from referencing and inventories – all for free.

“Hopefully, with the aid of some thoughtful lobbying by the property industry, the Government will think carefully about its next move regarding letting agents’ fees.”

Do you support the fee cap plan?