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Apparently tenant fees will be banned in today's autumn statement.
This is a good thing from a tenants point of view obviously, as some agents were taking the proverbials with in the worst cases, non-refundable fees of hundreds with no guarantee of being offered a tenancy.
Personally I don't use agents or charge fees, and that definitely helped drive viewings through the door, with most viewers citing non-refundable agent application fees as a big disincentive. It probably helped me to charge a slightly higher rent than I other wise would. I wonder where agents will try to recoup the money. Did Scotland see increased landlord fees following their ban?
I think we'll see an increase in agent management fees. I'm pleased for tenants, many of those fees were complete rip offs
You, I and the Housing Minister agree on that front. Where the market allows rents will increase - otherwise someone is making less money most likely Landlords.
Though at end of the day, we charge £60 so wont make much difference. I have no sympathy for the agents that charge hundreds.
Im not a fan though as it means a "successful tenant" will be paying for the failed referencing of the unsuccessful tenants, via rent increases not just there own.
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Press release from the RLA:Plans to ban letting agent fees paid by tenants, expected to be announced today, will increase market rents according to the Housing Minister.Gavin Barwell MP said in September in a tweet responding to a call for a ban: “Bad idea – landlords would pass costs on to tenants via rent. We’re looking at other ways to cut upfront costs & raise standards.”Just last week, the Communities and Local Government Minister, Lord Bourne, also expressed reservations about such a policy warning that “we must be mindful of the potential impact on rents from banning fees paid by tenants.”Responding, Alan Ward, Chairman of the Residential Landlords Association said:“This will not help tenants, especially those who are ‘just managing’.“Agents’ fees have to be paid by somebody. If any extra fees are passed on to landlords, tenants will end up paying them forever as market rents will increase.“It would have been much better for the Government to have taken steps to improve the transparency of fees charged by agents by forcing them to publicise what the fees actually cover.”
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
I don't use agents, can a landlord still charge for non-refundable holding deposits, retainers, booking fees etc?
I must say I am in disagreement with RLA. Fees are only good for agents, not for landlords. I was selling a bungalow recently and one agent I had round to give me a quote put forward this ridiculous scheme that would have charged buyers £5k for having an offer accepted. I told him this was a non-starter as if I was a prospective buyer I would run a mile at such an arrangement. Likewise letting fees put off potential tenants. It might not be so clear-cut as in this sales example because most renters are resigned to the notion of having to pay fees to sign up to a tenancy, but obviously fees vary enormously and there are no-fee landlords such as myself.
My experience letting out fee-free properties and numerous discussions with prospective tenants leads me to conclude that fees discourage tenants and depress rents.
I am sure all tenants would prefer slightly higher rents than arbitrary fees.
Was this the Modern Auction method by any chance?
when one market closes another opens
Learn Change and Adapt ?????
As a letting agent, we charge £225 tenant fee + £100 for every additional tenant. Other fees include £65 to reference guarantors and £35 renewal fees. That's it as far as tenant fees go and I hope you agree that ours are way below other agents fees. I know most people think that agents are making a killing but I can tell you that we manage 70 properties and, after four years, my wife has only just started drawing a measly £500 a month. One of the ladies that works for us has rented for the last 20 years. She too thought that agent fees were a rip-off until she started working with us. Now she can see how hard we work for very small returns and totally understands that tenant fees are justifiable. I would invite anyone to come and spend a day with us and you will see just how hard we work.
Don't get me wrong, I feel desperately sorry for tenants. Some of the stories we hear about how they are treated are shocking. While it's true that the landlord is our customer (the landlord instructs us, not the tenant) it is only right to treat the tenant with the same respect as the landlord. I've seen many cases where the agent has charged tenants £500 because they think they can get away with it. They size each tenant up and if they see a sucker, they pounce. Fees need to be the same for everyone and clearly advertised.
If tenant fees are scrapped, we will absolutely need to make up that money somewhere otherwise our business isn't sustainable. I'm not expecting anyone to feel sorry for us as hopefully, as we grow, economies of scale and recurring income make it more and more profitable but it has taken a lot of investment (approx. £30,000) to get to where we are. If tenant fees are scrapped today, I don't think it will include the actual cost of referencing and perhaps a nominal fee for a renewal will be allowed, so the tenant may still have to come up with something. The lost fees will have to be made up by charging the landlord, who will in turn put up rents. From a tenant's point of view, higher rents are probably preferable to fees as the expense is spread out over twelve months and they don't have to come up with such a large lump sum on the day they move in (fee, deposit and rent). Let's say the agent would normally charge £250 tenant fee, a £25 monthly increase in rent would cover this.
I think this will hit those agents who are ripping off tenants because many of them take advantage of tenants but they won't get such an easy ride with landlords, who tend to be a bit more savvy. If anything, I think this may help the fair lettings agents as we can more easily reclaim our fees from the landlord and he can see that we are fair.
With regard not using an agent - I used to advertise privately and I can tell you that having my properties managed by an agent is not only great for freeing up my time but it is cost effective. If you do manage rentals yourself, you have to be very organised, methodical and ready to act a moments notice. That's fine if you have all the time in the world but if you have more important things to be getting on with, using an agent (the right agent) can be the best thing you ever did. I for one have had more reliable tenants, less dramas and a more steady cash flow since using an agent.
Lastly, the holding deposit is essential. It give the agent confidence that the tenant is serious. You wouldn't believe how some people behave but, when hard cash is involved, if focuses minds and you know it's very unlikely they will muck you about. Anyway, the holding deposit comes off the first month's rent so it's not a tenant fee.
Perhaps it's another case of London experiences driving national legislation?
Just an anonymous opinion on the Internet.
Your fees seem high to me. These are my main agent's charges:
Application fee charges to tenants :- £132 inclusive of VAT for single or joint application. £12 deposit scheme registration fee plus £3.48 per applicant inclusive of VAT for credit search. An additional charge of £30 inclusive of VAT and an additional credit search fee of £3.48 inclusive of VAT is payable should a guarantor be required.