A pressure group says two letting agencies are to attend a public meeting in which they will explain themselves in terms of the fees and contracts they use.
The Bristol group ACORN - Association of Community Organisations for Reform Now - operates in the Easton suburb of the city and calls itself an independent community-based union of low and moderate income households, building people power for change.
It is holding a meeting on July 3 as part of a campaign which ACORN says has three aims.
Firstly it wants letting agents to scrap tenancy fees, which the group claims are extortionate and unjustifiable; secondly agents should introduce 12-month fixed term tenancy agreements instead of current insecure rolling tenancies that don't benefit tenants, landlords or the wider community; and to move towards longer three or five year fixed term tenancy agreements wherever possible.
The two agents agreeing to attend the meeting are believed to be Besley Hill and Piper Properties; ACORN claims its in-person attempts to recruit other agencies met with varying degrees of resistance.
ACORN claims to have at least 700 signatures on a petition demanding agents drop their unjustifiable and exploitative fees, and provide tenants and landlords with more security.
The group says it wants other agents to attend next week's meeting - promising that we'll take more action if not.
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Comments
Having read the majority of the articles relating to 'letting agent fees' I'm slightly surprised that this is still a topic for discussion, considering that agents are mostly being transparent with their fees.
My experience of agent fees.
I have recently rented a house from an agent who's charges, in my opinion, were very reasonable - 255.00 for 2 applicants. I did attend a number of viewings, and of course, I asked what the charges were for 2 applicants. I would say that the majority of agents were priced similarly. However, there was one agent who was charging 480.00 plus an additional charge for moving in on a Saturday. I totted up the maximum that they could charge for 2 applicants and it was a staggering 632.00. (This is an South Manchester based agent, before people assume it is a London based agent) Even though they had a property I liked, I made a conscience decision not to rent through them based on their charges.
1. Prospective tenants do have a choice, and if the fees are staggering, then don't rent through that agent - I didn't!
2. In my opinion you can potentially put off landlords by charging such extortionate fees to tenants, hence why this agent didn't have much to offer to the market.
3. I don't see why fees should be passed over to landlords based on the fact that they want to vet the people who will be living their property. If you have a property to offer, why should the landlord pick up all the fees because an agent has found a tenant.
If you don't want to pay for an agent to provide you with an agreement, register your deposit and provide you with a detailed inventory then try a web portal where everything is free, and you'll soon realise why agents still exist and charge fees.
By the way Kev tour reservation fee is almost certainly a deposit - the obligation on the applicant is to continue to complete a tenancy.
That makes it a deposit - as are most holding/reservation fees call them what you will. If the money could either be paid back to the applicant (as in if Landlord changes their mind) or is converted and turned into something else later (like the deposit or in your case rent) it is almost certainly a deposit.
The only way to proceed on this is to charge an application fee which of course the applicant has no expectation of being refunded or used for some later purpose to their benefit.
Thanks for the figures Kev
First point to make is you make history as the first agent likely to be the subject of a harassment allegation before even having people as tenants. Inspect their existing property first!! I have been in this industry well over 20 years and have never heard of such a practice, at least not as standard in a business. How do you broach the subject of the visit Kev, How do you set up that visit
Next if you think charging 330 for a couple is a reasonable fee I can only assume you must be London based. The fact it is "all inclusive" is a red herring as it is only the same as charging say 150 and then all the other little add-ons that most agents have as their fee structure.
The war will never end Kev as long as agents charge too much. I have never said they shouldn't charge reasonable fees (though see below) but the fees most agents charge bear no relation to the actual costs incurred, and are simply another income stream and profit generator.
How any agent charges and gets away with more than 150 for a first applicant and around 50 for each additional has always defeated me.
What is actually needed is Scotland's system and Landlords to pay everything. OK it might increase rents - it might not depends on the market, but all of you just ask yourself these questions:-
1. Who actually benefits from what the tenant is paying for
2. Who wants the tenant referenced
3. Who wants the tenancy agreement
4. Who wants the inventory - or at least wants it most if letting a furnished property
The industry has been bringing this scrutiny upon itself for years and has only itself to blame. You may be very professional Kev but I deal with the antics of agents (and landlords) all over the country and see horror stories you just would not believe including huge fees for appalling service.
Can everyone also stop making totally inappropriate and irrelevant comparisons with other industries and above all stop the ridiculous paranoia about conspiracy theories and housing LHA tenants
I've had to link to this on my company Facebook page as it is great to hear about other ethical agencies out there!
I'm a one man band in Southampton and I try to keep my costs as low as possible for everyone - but I need to pay my bills at the end of the month like everyone else. You pay admin (and even "set up") fees for lots of services - even buying a car. Business is business - but some companies really do take advantage and give all agencies a bad name.
A lot of valid points have been brought up. Long fixed term tenancies are going to benefit no one and they open up the door to more potential problems. I agree that agents are an easy target but it is people who don't understand the tenancy fees who complain about them. Maybe they should educate themselves on the services they're paying for before they demand fees to be eradicated and essentially have agents working for free. There is of course the issue of some agents having extortionate fees, however, to make the sweeping generalisation of all agents being corrupt is ignorant. Those letting agents give the rest of us a bad name.
Industry Observer - Good point - to answer your question about our charges:
We have been running now for 22 years and are the largest letting agent in our city. We find (and I am sure many other agents do too) that treating Tenants and Landlords as equal customers pays off big-style in terms of business referral.
Fees for Tenants and Landlords are key in our objective of generating business through recommendation along with excellent customer service and experience. There are 13 people working for our agency and between them they share just under 200 years shared experience. Over half have been there for over 20 years!
To answer your question re: fees:
We charge 220 for the first applicant, 110 for the second and 55 for the third. Therefore a "standard" couple can move in for 330 (ALL FEES INCLUSIVE OF VAT). The only other charge we make is 30 to renew a tenancy contract. Many people (who haven't a clue) say "well that's a rip-off for printing a few sheets of paper". Few realise the logistical effort involved in getting the bloody thing signed sometimes !! - often we have to make a dedicated trip (sometimes in the evening) to the Tenant's property to do this.
On the subject of fees, one thing I find abhorrent is letting agents who charge a tenant for providing a reference at the end of the tenancy. In our marketing we state "you will not be charged for a reference from us. This service is provided totally free of charge and as a thank you for renting with us and looking after the property".
As I said before no charges other than the initial tenancy fee and contract renewal. I.e. no rip-off charges for inventory, check-in, check-out, replacement contract, late rental payment etc. etc. etc.
One further point relating to our charges. We take a 520 reservation fee (obviously off-set against monies due before move-in). However, if we or the Landlord turn down the applicant, this money is TOTALLY refundable. The only time we will make a modest aministration charge is if the application is found to be fraudulent n any way - and this is usually only 50 + VAt for the time-wasting!
I once showed a lady round a flat we were advertising to rent and she worked for an Estate Agent who had just started letting (these companies are priceless!). She asked me "What's it going to cost me to apply" I said "Nothing really because our reservation fee is deducted from the monies to move in. She then said "Yeah but what if you reject me - what does that cost". She was shocked when I replied "Nothing as long as your application is honest". Her reply was "You lot are a bit soft - we sting them for at least 200 if we reject them. It's a good earner".
For professionalism's sake I will not name the estate agent involved (although would love to as their fees are extortionate and they charge all the usual; extras to Tenants for doing basically nothing). Suffice to say that these cowboys are the ones who need some kind of control - not our agency who I am proud to say operate fairly in my opinion. Indeed we do get a lot of feedback complimenting us on our service and fees.
I actually think part of the problem with fees coming into the spotlight is the huge number of estate agents who miraculously turned into letting agents overnight when the market crashed. Making 50 per month from each property you let and charging modest fees (as we do) makes it very difficult to get the business earning quickly - therefore they introduce a tranche of fees and rip tenants off for a failed application just to make a fast buck. But then that's the difference between a sharky estate agent and a conscientious letting agent with 22 years experience on the way to managing 1,000 rented properties.
Sorry for the rant folks - do you detect a degree of passion in my debate
Loving the war on letting agents, it keeps a bean-counter gainfully employed at Whitehall with an inability to understand facts.
One big fact that both sides of the industry have missed out on, is that these longer term tenancies are designed to help tenants that are claiming housing benefit. I can understands the emption behind that as people claiming benefits are all tarred with the same brush by a lot of agents, HOWEVER, what is being missed is now quite a number of buy to let mortgages state that only tenants who are employed may be allowed t let the flat, so agents cannot be blamed if a landlord is following their mortgage offer - what do the government want agents to do in that case, let them in regardless and have the mortgage and property snatched back - would they let their own property out to someone claiming benefit when that is changing the terms of mortgage offer, which you shouldn't do - so are the government chasing the wrong problem - again!
@Guest (Denise)
The answer to your last sentence question is - yes.
One slight issue with the suggestion of 3-5 year tenancies. Tenants won't commit for that long because of relocation, couples splitting up, etc. Besides, landlords won't want to pay fees for long lets either.
All these do-gooders as others have called them are usually the liberal softies and/or people who are often older and/or mortgage free. Makes them little more than hypocrites in my eyes.
I have yet to meet an estate agent who forces customers to use them. If you don't like it vote with your feet.
Well done, Kev!!! We are an independent letting agency operating in a wealthy Surrey town where the other agents in the town charge substantially higher tenant fees than we do. Yet our properties are of higher quality, immaculately presented and maintained and our property management services are second to none.
However, in this current witch-hunt we are tarred with the same brush as every other agent. This has to stop. Why don't these people who are campaigning against letting agencies find out the facts before they start shouting Yes, in every industry there are greedy, unscrupulous people who are ripping people off. But I think it is true that the good guys in our industry would welcome Government intervention to introduce regulation of letting agencies because we have nothing to hide and nothing to lose. Why won't the Government take this step Why are the campaigners being heard loud and clear when there is no industry body (ARLA, NAEA) standing up for us I have had enough!!! I am going to write to my MP and explain a few facts of life about letting agents who provide quality homes to decent people and do not - at any time during the process - rip them off. One more thing, it is all well and good demanding longer tenancies by right but I think the campaigners are forgetting that landlords own the rental properties and have the right to stipulate how long they are willing to allow tenants to rent them. Or are we moving towards a Communist State ..........
Blimey Kev what a rant!!
Think a few points need making here, but first what is the standard application fee you charge, and then the additional charge per tenant. Unless that is declared and you are transparent, then how can anyone judge whether your fees are "reasonable"
I see both sides of the argument, as someone who doesn't work for a letting agent, but does rent; it can seem like a lot to pay out all at once, but the pressure groups are, as Kev said, often made up of 'do gooders' with no real knowledge of the industry.
I can understand that some fees are excessive; in the area I am based, the cathedral recently listed a property for let with fees of 360! This is extortionate, no two ways about it. Especially considering the average fees are around 100-150 and there are about 45 active and profitable agents in the area. Excessive fees should be curbed, but at the end of the day you are employing a business to do you a service, and you do have a choice as a tenant of who to pay what for that service.
I, for instance, understand that there are expenses on the agents side; Getting to and from a number of viewings, time taken drawing up the paperwork and protecting the deposit (admittedly not hard work, but still time consuming), inventory costs (that protect both tenant and landlord), paying the wages of the staff they employ, maintenance costs, referencing costs, etc, and at the end of the day, I would much rather the security of using a letting agent, (especially one with CMP!), than a private landlord who isn't bound by the same laws and rules as an agent is.
I think a lot of tenants campaigning for fees to be banned do not understand or fully appreciate the security an agent gives them, and, if they get their way with 3-5 year tenancies, that fee of about 100-150 is a relatively moderate cost over the course of the time they intend to be in a property.
I don't think banning letting agents fees are going to get rid of the wider problems in society, which is actually the root cause of the uproar over fees- it is not the agents fault that tenants want/ need to move so regularly, which I guess defeats the object of requesting longer fixed terms!
As I said, I see both sides. I just wish the majority of tenants would listen to reason before kicking off.
EDIT- as a tenant who doesn't work for a letting agent- just want to wish Besley Hill and Piper all the best in the meeting.
I agree with a lot of this. There is a political agenda which involves deflecting criticism away from politicians who have consistently failed to delver enough homes to meet our growing population.
Agents are always a soft target but there are perhaps even more insidious forces at work. The easiest way to solve the housing crisis would be to tempt institutions into the build to let sector and hamstringing agents is one way to give those institutions a competitive advantage. i just returned from Spain where they already have 3 year minimum security of tenure and it is a total disaster. Getting rid of a non paying bad tenant is practically impossible, the courts are not there to make the system work, they just enforce the law.
These kinds of changes could could make buy to let mortgages more expensive if lenders think they will suffer more arrears, or worse still, lead to their withdrawal. Good tenants are never asked to leave by long term landlords, its perfectly possible to offer a three year lease if required under the present system.
Right now tenants have unprecedented choice when it comes to the market, if its not broke don't fix it
When is this ridiculous "fad" going to end I.e. the calls for letting agents to scrap fees and introduce longer tenancies by default.
It has been said by so many others and I will echo the comments made again: Across 900 properties managed by the agency I work for, the average tenancy length is about 18 months and these are Tenants deciding to vacate!!!! We only deal with working tenants and heavily vet them - even inspecting their current homes as part of the application process. We want to know they will look after the property they rent from us. Reasons for renting vary as we all know but I seriously doubt ANY of the Tenants we deal with would ever commit to a 3 year fixed term.
The issue of longer tenancies I feel is geared around lower quality Tenants who do not conduct themselves in a "Tenant-Like" manner, pay heir rent late, commit anti-social behaviour and don't look after their property. The current 6 month AST coupled with Section 21 allows Landlords and Agents to get rid of these people relatively easily. Obviously they then become a burden to local authorities after eviction. If the truth be know - that is what is behind all this. Keep the crap in the PRS and take the burden off local authorities.
Our Landlords are carefully selected by way of only taking on good quality accommodation. I have met hundreds of Landlords over the years who are renting their home out because they have a placement overseas for a year or two (just as an example). They match perfectly to Tenants who are looking to rent for a year/18 months between house sales/job changes etc. Introducing a mandatory longer term tenancy could prevent these lets
On the subject of fees, agents now have to be transparent in their displaying of fees so Tenants can take it or leave it. Fees are necessary for letting agents to make a living. it has been said many times before "no-one is putting pressure on mortgage companies to abolish their fees".
The "war" on letting agents has to stop. I don't know about anyone else but I am sick of it all. Every industry has it's rogues. The TV program "Rogue Traders" never falls short of material to fill it's programming schedule - neither does Watchdog. However, letting agents are being targeted. That dribble that Milliband suggested is the most laughable idea I have heard from a supposedly "intelligent" man. God help it if he ends up running our country next year!
Hopefully this "fad" will end soon when the FACTS of the matter are put to these "do-gooders" who seem to lack any tangible experience of the letting industry. Mind you - that will be only true if the "do-gooders" a) listen and b) actually understand.
One final point on fees. In the area we are known as having low fees. We charge a standard application fee based on the number of tenants. No fees for referencing guarantors, no check-in fee, check-out fee, inventory fee, no charge to print a reference and post it, no fees for a copy of the contract. In a nutshell - we only charge the application fee. We do charge for tenancy renewal as this is labour intensive, often arranging meetings at the property to arrange signature of the new contract.