Crystal Horwood Blog

The last time I checked we live in a capitalist democracy where the free market largely dictates prices.

It’s not Utopia and it has its faults but generally it seems to work okay and people understand that goods and services cost money.

Why am I reflecting on our political system? Because the head of Shelter, Campbell Robb, amongst others, wants to ban me from charging tenants a fee for our services.

 Mr Robb, whose organisation receives nearly a quarter of its funding from government – i.e me, a taxpayer – says our sector has become ‘truly out of control’ on fee-charging and so wants his paymasters to bring in new laws.

Let’s be straight here. I don’t like paying fees/charges/bills - call it what you like but who does? What PACE does and thousands of other letting agents do is provide a service to landlords and tenants and if we’re no good at it, we’ll fail.

The burden of a new rental agreement is shared between the tenant and landlord which I think is fair. And the reason we charge at all is because I have to employ people to carry out the work, pay for an office, ever-increasing utility bills, petrol for the cars etc. That’s the way of the world out here in unsubsidised land.

Let me take a few of the criticisms Mr Robb made. As we know there is a shortage of property and heaping more costs on to landlords could deter them. Some of the money we charge up front is to secure our and the landlord’s position – for instance, once the forms are filled out we take a property off the market while references are obtained.

If we then discover anomalies – which happens often - the property then has to go back on the market.  Who should pay for this lost time particularly if the tenant has been dishonest?  What about the work we have done?  Why should the landlord have to pay for that because the tenant has not been straight with us to start with? A financial commitment from a would-be tenant offers a surety of sorts and filters out the time-wasters.

Compare Shelter’s claimed average tenancy fee of £350 to the cost of setting up a mortgage which can run into several thousand pounds and it gives some kind of perspective.

I also take issue with Mr Robb’s claim that we don’t act in the tenant’s interests. Whilst it is true that the landlord is the client and we are their agent, there is plenty of statute to protect tenants such as the Consumer Protection from Unfair Trading Regulations 2008 and if the agent is an ARLA member, disgruntled residents have recourse there too.

I’m sure there are still unscrupulous agents out there who do rip off tenants and as an industry we should perhaps work harder to rid ourselves of them. But here in Southend the sector is buoyant with plenty of competition and choice.

Tenants can and do shop around, looking at four or five properties at a time. There is a good flow of stock and purchasers with plenty of agents who charge rock bottom prices – with the equivalent levels of service. But like I said at the start, we live in a capitalist system where customers can make their own choices.

I think that if you remove a responsible agent’s ability to charge reasonable fees you will distort the market which won’t help anyone. Complying with rules to protect tenants and landlords costs money.

Some agents claim to do regular visits and don’t. It costs money to be members of ARLA with the client audit, the membership and training fees, the CPD, registering deposits, dealing with disputes and acting as a negotiator between landlord and tenant.

The tenant fees are just part of what agents charge so they can make a healthy living out of it. Regulations are not just to protect the landlord – they are to protect the tenants.   Someone has to pay for them. That’s how business works.

Most importantly Mr Robb, the vast majority of landlords I know in Southend are not ‘stinking rich’.  Most have one or two properties that they have worked hard to afford while only a few have portfolios but all incur risks such as damage and failure to pay rent.

This is not a charity we’re running Mr Robb. It’s a business.

* Crystal Horwood is a landlord and agent, who is managing director of PACE, based in Southen.