Shelter has launched its widely-expected campaign to get all letting agent fees charged to tenants banned throughout England.
The lobbying organisation wants the practice outlawed by MPs, and in future only landlords charged.
The campaign has already garnered massive publicity. The launch included a piece on Radio 4’s Today programme yesterday, flagged up by presenter James Naughtie as “Are letting agents out of control?” and a mass email send-out inviting Shelter followers and supporters to sign a petition. This morning's round of national newspaper include shrill headlines accusing letting agents of fleecing tenants and forcing them into debt.
The launch in England comes after Shelter was instrumental in getting fees banned by law in Scotland.
In England, Shelter is aiming just as high and its petition calls for politicians to act.
The organisation claims that letting agents’ fees are now “truly out of control” and that tenants are having to go without food or heating to cover the costs.
Shelter completed a mystery shopping exercise of 58 letting agencies across England and found that they charged tenants on average £350 in fees to set up a tenancy, on top of deposits and upfront rent. Almost one third of agents charged over £400 and seven charged over £700.
In some cases it investigated, says Shelter, the agents did not refund fees, sometimes hundreds of pounds worth, when the tenancy did not go ahead through no fault of the tenants.
Speaking on the Today programme, Campbell Robb, chief executive of Shelter, claimed that agents were charging landlords and tenants for the same service, although the contract was with the landlord.
Ian Potter, managing director of the Association of Residential Letting Agents, said that an upfront payment was necessary as “that is where the costs are incurred”. He said that if all the costs were transferred to the landlord, it would simply put up rents for tenants.
Potter and Robb disagreed as to whether rents had risen in Scotland as a result of the ban on fees.
The Shelter research claims that one in four people who have dealt with a letting agency in England in the last three years had to borrow money to pay for fees, and one in six had to cut down on food or heating to meet the cost. One quarter said that letting agents’ fees stopped them from being able to move to a new home.
The Shelter report, Letting Agencies: the Price you Pay, said that charging only landlords is a “fairer way of doing business”.
Robb said: “Anyone who has tried to find a rented home in the past few years knows that affordable, decent places to live are in short supply, and often snapped up within hours.
“The high demand for rented homes means that renters can’t shop around, but instead have to deal with the letting agency their landlord has chosen: they have no choice but to swallow their anger and stump up their cash.
“People often forget that the landlord is the real customer of a letting agency, but the fact that renters also pay fees leaves both expecting the agency to act in their interests. This adds up to a confusing situation that leaves landlords in the dark and renters powerless.
“The only way to fix our broken lettings market is for the Government to stop renters being charged for the costs of setting up a tenancy.”
Caroline Kenny, executive at the UK Association of Letting Agents (UKALA), said that it was not “always appropriate” for only the landlord to be charged pre-tenancy costs.
She said: “Matching prospective tenants with suitable properties is resource intensive and can be extremely costly.
“The bulk of any agency’s costs are covered by the fee paid by their landlord client. However, it is not always appropriate for the landlord to meet pre-tenancy costs, particularly when they are associated with proving the suitability of an applicant.
“It is therefore appropriate for a prospective tenant to contribute towards the administration and referencing process before a tenancy begins. This demonstrates commitment to the prospective tenancy, safeguards against an applicant securing multiple properties simultaneously to then reject all but one at the last minute, and protects agents and landlords from applicants who provide false information.
“Tenants ultimately benefit from these processes being carried out professionally. Proper process such as the inventory check-in and check-out helps to protect the tenant.”
Kenny also pointed out that letting agents will shortly have to obey new rules when they advertise properties, after the Advertising Standards Authority banned a Your Move advert that showed the rent but not the fees.
The Committee of Advertising Practice (CAP) is expected to publish its guidelines shortly.
Kenny also said: “As an industry, we must continue to push for minimum standards to be adhered to, including the provision of Client Money Protection and Professional Indemnity Insurance, a commitment to professional development, transparency of all terms, conditions and potential charges, and most of all, excellent customer service.”
She emphasised: “At UKALA, we are completely against overcharging.
“Unfortunately, however, there are unscrupulous agents operating within the industry who are overcharging tenants and damaging the industry with their dishonest practices.
“Within any market place it is important for consumers and providers to find a price-point at which businesses can succeed and consumers can receive value for money.
“In order to achieve this, UKALA believes that agents should ensure that any fees and charges are made clear in advance of entering into any business relationship.”
Comments
At the beginning of this month, we announced that we were no longer charging tenants fees to apply.
Yes, we get more applicants, but that's what we want. If we're not charging and another agent is, who are they going to choose?
It takes time for a tenant to apply and then submit an application, so I don't agree with the argument that they will be applying like confetti. We've seen no evidence of this.
From the applicants we get, we choose which one to put forward.
We find that houses go quicker. So we save money with fewer viewings (we do block viewings and have no issues with no-shows). We get our tenant find fees from landlords.
A landlord is happy to pay more for a shorter void - they lose money every day whilst a property is empty.
Lets face it. It is already in place in Scotland. It is a popular policy for the masses and it is going to be introduced. You might as well get on with adjusting your business model.
"You are one of the respected and balanced posters on here "
when did that happen? I'm sure there are a few people on here who would disagree.
It would be a great thing if Ros Renshaw picked up on this micro revolution and ran it as her number one story tomorrow morning. No1 story on "LAT Tuesday" circulated to the LAT newsletter distribution list re- tweeted and liked on Facebook and Twitter is likely to reach a far wider audience than 600 or so couldn’t care less, do nought MP's.
Shelter's charity status called into question as lobbying gets out of hand in breach of Charity regulations....
You are one of the respected and balanced posters on here how about you email Ros and ask?
A complaint to the charity commissioners may help but why not use our own MP's? they are paid to listen to the voters (ok, I know many of them don't) so we should encourage as many people as possible to raise Shelter's 'change of charitable status' to their MP's and have them ask the relevant questions.
I fully appreciate the cost of food has risen quite a bit over recent years but I really would question why someone who earns £120,000 would " try to keep an allotment."
Fair enough Mr Robb might end up out on his ear on day and might struggle to put food on his table, he might well be tending an allotment that has been in the family for generations but surely until Mr Robb does need an allotment to provide food for his family table wouldn't it be better to release the allotment he is, implied from the quote, struggling to maintain back to the waiting list of prospective allotment holders who would use the allotment for something more than hobby?
to clarify only the first paragraph is from shelter
"Shelter believes all costs relating to finding tenants and setting up a tenancy should be negotiated between landlord and agency and charged to the landlord as the client."
A quote from shelters website
Shelter believes all costs relating to finding tenants and setting up a tenancy should be negotiated between landlord and agency and charged to the landlord as the client.
If the landlords has to cover more than 1 or 2 referencing fees they are likely to take whatever tenant they can get.
This MAY put the property at serious risk of ASB and/or poor property management thus imposing selective/additional licensing. Resulting in the tenant being evicted.
Thus increasing Shelters workload
With at least 5 campaigns against Landlords or letting agents Shelter have ceased to be a charity for the Homeless and are now clearly a political lobbying organisation. That compromises their status as a charity.
Instead of signing a petition I suggest a complaint to the trustees of Shelter would be a more effective way of reigning in Mr Robb’s well intentioned zeal.
However given the reluctance of Mr Robb to take phone calls or receive emails a complaint direct to the Charity Commission might be more appropriate, especially given the grievous and sustained nature of the lobbying against Agents and Landlords.
http://www.charitycommission.gov.uk/how-to-complain/complain-about-a-charity/guidance-for-the-general-public/
@ Cheers Mark
Thanks for that, I have made the changes and also added some other features to help spread the word
If you care about this issue please sign the petition
http://www.lettingagentsupportklub.co.uk/petition.html
Thanks
Shelter really is a vile organisation.
They raise £50m on the basis that there are 50,000 people in temporary accommodation.
They then divert that money to pay their staff generously and to provide a national helpline and legal representation for tenants.
They do not supply accommodation and vociferously criticise those who do.
This means that any accommodation that shelter secure for one person is at the expense of another person and they have annexed social housing away from the low paid to give it to people on benefits.
I think the government should investigate Shelter as to me it is misleading their donors.
I also think power should be returned to local authorities to allocate their housing stock as they see fit.
Two examples of why this important are:
1 A local authority used to keep back bungalows to give to either elderly or disabled tenants now this is illegal and the property must go to those most at need.
2 A local authority has a tenant with rent arrears and is causing anti social behaviour. They go through an expensive eviction process to evict the tenant. As the tenant is now classed as homeless they go to the front of the queue and the council had a duty to provide accommodation for them.
Whilst looking through the requirements of setting up and running a charity it seems that a charity should not engage in political campaigning and lobbying.
Given how vocal and active Shelter have been in their fight to control Agent fees in Scotland, their various campaigns against Landlords and as clearly described by this article as a Lobbying Organisation seeking Political change, is it not very clear that Shelter are clearly breaking Charity Commission rules and their status as a charity ought to be withdrawn?
This started as letting agents are cons,and has bounced back,to Shelter is a Government funded scandal.
Many excellent points raised,none support Mr Robb.
I know they do nothing,provide no accomodation,,but are funded by Local Authorities who are out of providing homes,but into taking money for pseud schemes such as HMOS,and charging rents on vacant property.
Why do Government support?To give out propoganda.
We are going back to all private landlords are evil,as is anyone in business especially an employer..
Sadly many properties are owned by slump landlords,who rented as they could not sell.
Tenants make offers below asking rent,if there were no admin fee they would make applications without commitment.Rents will rise 10% to cover costs that agents will pass onto landlords.
Government interference through subsidised bodies is disruptive.First target agents,then hit landlords.
Leave everyone to be free,not under an elected dictatorship,or worse still a Government reminiscent of Germany in 1930s.It was easy for Hitler,and the Nazis to wind up the nation against those who saved and worked to create wealth.Sadly we cannot change state culture,.
People have choice,but no longer state provided homes.
Can we not be united and happy for once ,envy is green eyed monster,William Shakespeare.
I have been giving some thought to this, prompted by the reserves that shelter are holding onto, the salaries they are reportedly paying themselves and balancing that with the good they are actually doing for those they are entrusted to represent it is my opinion that Shelter don’t actually represent particularly good value for money.
Remaining clinically objective I have come to the conclusion that reserves equivalent to 21,000 typical deposits could probably be more wisely spent giving direct aid to tenants in difficulties and would be tenants rather than buying a high level campaigner to bang a drum for tenant’s rights. Of course it is important to bang the drum and rattle the collecting tin to raise funds and one has to pay for someone of Mr Robb’s obvious calibre but it occurs to me that if the whole industry were a single company with exactly the same issue it would be unwise of the company to spend so much money reinforcing the fact there is a problem that needs to be solved. The money would be better spent on the solution.
It occurs to me that very few landlords could object to a charitable donation of £10 out of their average annual rent of £8400 per tenancy per annum. This a contribution of 0.12% [just over one tenth of one percent]
With taxable allowances and Gift Aid, a £10 donation per average tenancy with tax allowance is a net donation of £7.50 per tenancy. With gift aid that £7.50 becomes worth £12.50 to charity.
I think as an industry we are more than capable of running our own Homeless Charity. Collecting a net £22,650,000 from landlords with a £15,000,000 contribution from HMRC we can give ourselves an annual aid fund of £37.75 million per annum without spending a single penny on campaigns or tin rattling. Most of the lettings and property software in use today is capable of automatically deducting and routing a property expense of just 84p per month to a separate bank account. Most software will detail that expense on a Landlords’ statement and annual tax summary as a category item. There is very little work to do to implement and collect annually a charity fund that is nearly twice the reserves that Shelter has in their coffers after years of saving.
Nearly £40 million pounds per annum is not an insignificant wad of cash, I am sure that making that sort of money available to tenants as a loan fund or as aid to overcome all of the issues Shelter is seemingly laying at our door could be more wisely and efficiently spent by a professional industry that understand the subject, the issues and the tenant.
This might be a mad and naïve idea but is it one worth running by the Industry? If Shelter insist on a fight we as an industry ought to be up for that fight. Certainly as this is direct and blatant attack we ought to respond with something a little more effective than posts on a forum that only a few will ever read.
Good effort, I have amended your text so those who would dismiss you effort on the grounds of spelling and grammar can't do so.
You can copy and paste the amends from here.
Shelter has today launched a campaign to outlaw Letting Agents Fees. According to Shelter:
• 1 in 4 people in England and Wales claim to have been charged unfair fees.
• Over 50% of people who have used a letting agency have subsequently experienced financial difficulties because of being charged a fee
• According to Shelter, 1 in 7 of tenants surveyed has been charged more than £500 in fees.
If you are a letting agent please sign this petition. If you are a landlord or tenant and think you have been treated fairly by your letting agent please also sign this petition. There are many excellent letting agents out there that provide a good service for their money but more importantly help to provide good housing.
If Shelter are successful in convincing the government to outlaw agents fees in England & Wales, the costs involved will either be passed to the landlord or rents will go up to pay for them.
Please sign today!
@Dave
"We should all start a petition ourselves! see how many letting agents we can get to sign."
Your wish is my command - if you are an agent, tenant or landlord please sign this petition and pass it roiund to your friends and clients!
http://www.lettingagentsupportklub.co.uk/petition.html
Further food for thought. In the latest annual accounts (2012) Mr Campbell Robb was paid circa £120K. Nice to see that he gets paid more than the Prime Minister.....
I am presuming that as Shelter is a charity, then Mr Campbell Robb works for free, thereby not incuring any costs for the individuals / people that he represents?
Agree with the comments below, the biggest cost is at the start of the tenancy, setting up the documents & making the arrangements etc. Our agency always advises the tenants fees before the viewing so that any prospective tenants know exactly what they need to pay before even seeing the property!
On the point of regulation, does anyone have a positive view or experience of a UK regulator in any sector? Perhaps there are some effective models that we can reflect on….
I'm sure landlords will love to pay even more than they already do. Why would a landlord pay to put someone into their own property? The only reason agents fee's exist is to protect landlords from tenants that shelter are trying to home.
@cynic you asked "why tar all the agents with the same brush"
The answers are simple;
It is easy to do so. It is commercially beneficial for some companies to paint the whole industry as Rogue as a means to lobby for legislation that would be financially beneficial to said company. It is quite easy to manipulate statistics to an audience that is ignorant of the real situation and present them to a news hungry media in such a way that dubious data manipulation becomes salacious fact. When less than 900 complaints are upheld against Agents in a 12 month period out of over 3.6million tenancies is presented as “complaints have doubled in 5 years” it is, in my opinion, an unwarranted and unjust manipulation of data that is bordering on deceit.
Against the background of falling membership to near unsustainable levels it is obvious that Industry governing bodies will claim non members are not to be trusted, any agent not of that body has to be rogue; it is pure and basic disturbance selling. It is very obvious that ailing bodies will lobby for regulation, regulation equals membership. Dress it as you like, it is membership motivated and intended to control competition.
That might seem to go directly against my previous suggestion to join ARLA but in the same way as you object to all Agents being tarred with the same brush. I think Ian Potter needs to be given chance to rebuild ARLA from the depths it was taken by all that was bad about NFoPP, he needs the support of good and decent agents to do that. There is no point having multiple Industry trade bodies all reinforcing a message of Roguery. A single professional body that supports the industry and its members when needed, which speaks with authority and is respected for its commercial independence has to be the only viable way to raise standards and respect of the public.
Next, they will be trying to ban rent.
There are good and bad in all professions.
Some letting agents are VERY good
Some letting agents are VERY bad
Why tar the whole industry with the same brush?
nicely put Robert
@ k
That's a pretty sweeping statement considering you won't have visited every agent in the country or have knowledge of every different business model. When did you come to my office and establish what we charge?
We outsource nothing in my office bar the referencing simply because its cheaper for the tenant that way, I resent and reject your charge that we outsource everything and then put a 'fat margin' on top.
Like any industry we have our rogue element; their is legislation a plenty to deal with them should the tenants, landlords or authorities choose to deal with them - usually they don't. Thats a british culture trait not a failing with letting agents in general.
This is typical of the 'jump on the bandwagon' attitude that is so prevalent in the UK today, and usually based on no actual evidence of any wrong doing. Have Shelter provided you with the details of the survey they carried out k? No, I bet they haven't because no one else has seen it either.
We charged fees to tenants in the 90's and I can't think of any company around here that was in operation then who didn't.
There is very little point getting hot under the collar with Shelter, Campbell Robb is simply exploiting the way things are to fight the cause of those who find themselves in the limbo of limited or no choice fighting to compete with increasing competition for a home. For most tenants there is a very clear slot into which they fall; Private Tenants, Housing Association tenants and Social Tenants, those tenants accept their lot and go about their business without fuss or complaint. Unfortunately and inevitably there are others where circumstance is not ideal and life is not to their liking, there is unfairness which leads to complaint; some justified, some not.
Nearly 20 years of influence over the emergence of technology into the Lettings and management industry require me to understand how the industry works [necessarily to a VERY detailed level] I have had to have face to face contact with the day to day operation of the full range of agents and landlords as well as those who govern the industry. With that experience I would claim; On the whole it is not Agents or landlords who are at the root of the failure to house the nation. From the highest level of government and civil service there is only a superficial understanding of what should be a fundamental element of our society. As evidenced this week, those who are briefing MPs clearly lack proper understanding of the complexities of housing. There is clear evidence of commercially motivated lobbying of government and so it is of little surprise to me that Campbell Robb and Shelter can direct and manipulate individual targeted campaigns against Agents and Landlords. He is simply using the stereotype propaganda of Rogue Agents and Rogue Landlords that those briefing and lobbying the media and government are pumping out so regularly and so effectively to support their financial gain.
Ian Potter can’t be expected to be the loan voice representing and defending our industry especially as most of those being so vociferous are non ARLA members. To those Agents who have posted on this thread I would suggest you see that Ian Potter is standing up to sustained and orchestrated campaign against Agents and if you are not of the ‘Rogue’ persuasion at whom this latest campaign ought to be targeted you would do well to consider joining ARLA and support them to support agent fee structures that is justifiable and fair.
Alan Ward at RLA is doing likewise for the landlords he represents and deserves a chest full of medals for the campaigns I have seen him fight on their [his landlords}behalf.
Those stakeholders charged with housing our nation enjoy the privilege of authority and can hide behind a curtain of security and procedure so they can be seemingly deliberately deaf to suggestion and criticism. That is as it is and can’t be changed however it is wholly wrong and unwise for those stakeholder to alienate the industry and individuals with the experience, means and motivation to solve the Housing crisis.
Well I wasn't charged fees by letting agents in the early 90s. In the late 90s I had to pay a nominal charge for the bank reference. In those days it was only 4 weeks deposit as well. Renewal fees didn't exist. Check out fees didn't exist. Letting agents actually did some work in those days. Now they just outsource everything to third parties and charge it to the tenant with a large fat margin on top!
'...........fees for tenants didn't exist 20 years ago, but letting agents still made a decent living'
Er.....'fraid they did matey. Ever since the AST came about in 1989. Where have you been?
I think Shelter is absolutely right.
The posts that predict doom for letting agents are easily disproved - fees for tenants didn't exist 20 years ago, but letting agents still made a decent living.
Fundamentally it is wrong to take money from both sides. The letting agent acts for the landlord, not the tenant. To take money from the tenant is a conflict of interest.
The fees are not representative of the actual costs involved. The reason why they are so high is because they were hidden and not subject to competition. The agents rely on the landlords not enquiring about or negotiating the fees for tenants.
If this happens we can say 'bye bye' to many letting agents, therefore a loss of vat and other tax for hmrc, landlords will increase rents to compensate for extra charges from letting agents thus affecting the tenant anyway, landlords need letting agents. If shelter are successful then the government has to look at other industries such as mortgage lenders and car leasing as they all charge admin fees too! Letting agents charge these fees to purely cover costs for time and expense, if there wasn't so many bad tenants out there then referencing wouldn't have to be carried out! It all seems to be in favour of the tenant, what about landlords who lose thousands of pounds from unpaid rent and properties left in poor condition, maybe we should all sign a petition for landlords to be able to evict tenants within 24 hours who are in breach of their agreement. I think shelter should get in the real world and look at it from all points of view, come on nals and arla, where is your support for letting agents?? By banning fees it will hurt the buy to let market due to extra expense for landlords, surely our aim is to improve the sales market, not damage it even further!!
My thoughts are that like religious extremity, there are those few agents ruining it for everyone else.
I believe my fee of £120 to be more than reasonable for my time and costs involved in ensuring Tenants are fit for purpose.
The reference to Tenants having to go without food and being forced into debt is absolutely laughable!
They make out that 'the tenant' is a poor helpless lamb lost amongst dens of Wolves and unable to make a decision for themselves.
Realistically, if an agent tried to charge you £500, you'd tell 'em where to go.
We should all start a petition ourselves! see how many letting agents we can get to sign.
I agree with Ian Potter. It doesn't cost us anything once the tenants are settled in, and their rent payments are coming in. Where it costs us is setting the tenancy up, referencing etc etc.
This kind of thing costs money. I agree that £350 may be too much to charge, but some form of charge is necessary. We charge £150 for tenancy preparation, and we don't believe that is expensive at all.
Why Shelter have got involved with this, I'll never know.
1 What is the total amount of Shelter's reserves?
£22,143,000
2 What income does Shelter receive direct from national and local government?
UK govt £2,569,000
Scottish govt £553,000
Local authority £5,254,000
3 How much does Shelter pay Campbell Robb?
The average Shelter employee earns £33,054 whilst Campbell Robb earns beteween £110,000 and £120,000
4 What do Shelter actually do
Lobby group
Legal representation for tenants
National helpline for tenants
Referencing, Tenancy agreements, Inventory, Check in & out, Office administration - is what the tenants are charged for.
Referencing (cost an agent between £14 & £50), Tenancy agreements - cost for data input and printing cost (approximately £50) there may also be cost to purchase the original or to have it updated with solicitors, Inventory (A decent inventory can cost £150 this may be charge to a landlord but the tenants may have a cost associated with this), Check in & out (approximately £70 each usually 1 is paid for by the tenant), Office administration for each tenancy, you can look to spend about 2 hours in negotiation and preparation (Approximately £20). Even at cost price the agent would need to spend over £130 for tenancy preparation without any mark up. With every business you need to make a profit. I agree fees over £350 are excessive but everyone has a choice if you don’t want to pay the fee’s then don’t use that agent ?! Landlord should also be asking what the agent charge the tenants if the landlord thinks that the fees are excessive then don’t use that agent!? The fees will soon come down !
I listened to Radio2 yesterday and was getting so angry listening to Shelter.
How many agents charge over £700.00 in fees for one applicant?? I'd be amazed if it is more than 1%. As someone rightly said Shelter should focus on targeting those agencies rather than tarnishing everyone with the same brush.
BTW how many of you other agents have prospective tenants not show up to viewings and waste countless hours throughout the week - it's illegal to charge applicants but I feel it should be legal to take a deposit of say £25.00 and if they fail to show they incur a charge. My Chiropractor does this - why can't I be compensated for my time!
Sitting here reading this story on Shelter's activities with regard to petitioning against admin fees for the tenant's is completely abhorrent and ridiculous.
I say this knowing that some agents may over-charge but for us 'fair agents' a modest fee to cover our intial costs is completely reasonable. What Shelter should be concentrating on is 'blowing the whistle' on any agents over-charging.
God only knows what I will be doing when the world hits a stage where a service is provided at my cost just so someone doesnt have to pay any money at all. Im guessing if this law passes, my family and I are going to be the ones who cant afford food or electric!
You dont need to fix the lettings market if its not broken. So to all petitioning for 'no admin fees' for tenants please think about all the companies out there who are NOT taking people for a ride and think about how it may effect them!...
I sympathise with all those who are being charged hundreds and hundreds of pounds. Without condoning or condemning I believe it wrong to offer a service thats costs us...for free.
Lots of valid points here, Shelter. Don't expect an invitation to next year's Arla conference - this year was clearly a mistake and I'm sure won't be repeated.
Don't understand why you tarnish all agents with the same brush. If we did that with tenants, there wouldn't be very many tenancies in this country.
I wonder if the executives at Shelter would work for nothing themselves to help homeless people. I think that answer is a resounding no. Maybe they should be lobbying the government to provide more affordable social housing (what we olduns used to call council houses) to house the low waged or homeless or even ask the gvt to exempt letting agents from charging VAT on their fees... that would reduce costs to these applicants by 20% overnight for a start instead of trying to make the private residential rental market a charity case.
Shelter, if you truly believe agents are as bad as you say then perhaps you should open up your own agency.
You could also buy/build houses for these poor "victim-tenants" that you claim exist.
That is my challenge, now put your money where your mouth is!
We need to increase our agency fees, we do not even charge the average. Thanks Shelter for the advice.
Am I reading this right:-
Go to page 36 of their acccounts...
http://apps.charitycommission.gov.uk/Accounts/Ends10/0000263710_ac_20120331_e_c.pdf
I think this reads that there are actually 8 employees at salaries over £60,001 and two at over £80,001
Perhaps shelter could also explain who's the number one earner at £110,000 - £120,000...? Fancy taking a pay cut to help the homeless...?
We've done the sums and if tenant fees are banned then we will also ban discounts on fees to landlords and will be (slightly) better off as a result. So, no problem for us financially, but the landlords won't be happy and knowing them as I do, the vast majority will demand the maximum possible rent at every opportunity (at the moment they are quite relaxed, especially at renewals with a "good" tenant). Hmmm, that will push our fees up further.
Letting agents are private companies and their charges for professional services should not be set by government or any third party. If tenants are not happy with the fees that an agent charges they can simply choose another agent or rent directly with a private landlord. It is not a tenant’s right to rent a property that an agency is marketing, agents are not housing associations or charities and like it or not they have to make a profit like all businesses otherwise they would cease to exist. Shelter seems to be under the impression that the private rental sector should be free for all tenants, why? A service is being provided to tenants as well as landlords – who pays for this? Running a professional agency is an expensive operation when you take into account all the associated costs for staffing, insurances, professional accreditation, marketing, training, transport etc…and this has to be paid for. Tenants are still a client of the agency and our tenants expect us to deal with them instantly throughout their tenancies when something goes wrong or there are maintenance issues and unfortunately this all has to be paid for. The reality is that our monthly management fees (we charge between 10% and 12% depending on the service the landlord chooses and manage a high volume of properties) do not cover the agency running costs and therefore charges have to be made for every service we provide to ensure staff are available all day everyday and out of hours to provide a professional service which is what tenants tell us that they want – if they choose to rent through an agency they expect to be dealt with professionally and like every service business peoples time costs money.
Good questions Arnie. The responses will be interesting…….. Shelter have a view on how things should be done, why don’t they raise capital, buy residential property, let and manage the property, collect rents and really help the people that they are supposed to represent. I guess this is much more difficult that criticising those that do provide a service and homes for people who don’t want to buy or can’t buy their own home.
ARLA have been playing a dangerous game letting Shelter and RICS label letting agents as "Cowboys" to push forward their regulation agenda and now it has backfired as Shelter are using their misrepresentation of letting agents as justification to ban tenant fees.
For most letting agents a loss of this income would lead to a reduction of approximately 7% of turnover.
Regarding Shelter would anyone like to have a guess as to the answer to these questions:
1 What is the total amount of Shelter's reserves?
2 What income does Shelter receive direct from national and local government?
3 How much does Shelter pay Campbell Robb?
4 What do Shelter actually do?
Answers to follow later today.
Here we go again! What are Shelter trying to achieve? We have a housing shortage across the UK and private landlords, often with the support of letting agents are helping to solve at least some of the problem. Shelter quote incorrect statistics and attempt to make out that all letting agents are rogues, this is nonsense and will only worsen the housing situation.
1. Not all tenants are poor; in fact the vast majority who rent in the PRS are more than able to pay for a good service.
2. Not all letting agents are rogues; in fact the vast majority are small, family run forms who care about their customers, landlords and tenants. They go out of their way to provide an excellent service.
3. Professional Letting Agents have a significant cost base, without covering costs and making a profit they will not exist. What is the alternative model? A network of some 10000+ small letting agent firms service the PRS almost every city, town & village in the UK.
4. Landlords invest in residential property in order to make a decent return. If landlords fees increase then so will the rent; simple!
5. Imagine the scenario were prospective tenants can apply for as many properties as they choose only to withdraw at the last minute without any costs; total chaos, costs out of control and landlords losing money through prolonged void periods.
The vast majority of letting agents do a great job, Shelter should focus on doing the same and prioritise their activities focused on the section of the community that they are supposed to help. ARLA, NALS & RICS now is the time to stand up and be counted, represent your members with vigour and most of all, get your facts right!
So, Shelter who turn up at County Courts to help EVEN the most feckless of non-paying tenants want the Letting Agents (who often have to work unpaid when dealing with difficult arrears cases) not to be able to charge for a service? Without the private rented sector the homelessness problem would be 100 times worse. If we cannot charge fees we do not have a business. If we do not have a business then there is less property on the market to rent. This guy needs to try and get a job in the Private Sector. YES some agency fees are laughable but we cap ours and charge Per Letting, not per applicant. That's fair in my view!
Stupid as they may be Shelter are not advocating that agents should provide their service for nothing. Shelter want the landlords to pay everything except the actual rent.
What they do not understand is Human Nature!
A reasonable payment by tenants addresses a lot of the abuse of a system. Something for nothing is always abused - look at other 'freebies' in society.
The industry should not give an inch on this - ARLA, RICS where are you?
Simple good service by good agents has a price. Agents can't operate for nothing.
Sad fact is that many BUDGET marketeers (and I refuse to call them agents) offer free to list to private landlords in return for taking their charges from tenants. As such Ive heard stories of unhappy landlords getting crap tenants.
Whats worse is that main portals allow these private ads next to agents landlords ads which cost agents through the nose to subscribe to.
I'm sure Shelter will soon complain when rental prices go up because fees to landlords have to go up to cover the lack of charges coming in from tenants, just like they have in Scotland.
So many words, so little said!
Stop regurgitating meaningless cliché, learn the subject and then speak with authority. At present you are demonstrating how little you know. If you are going to hand down diatribe contribution at least have to good grace to make it relevant and factually sound. You might get away such contributions in circles where position substitutes for knowledge and etiquette dictates polite silence, but this is the coalface where the miners who understand the business speak as they find.
What should be done is to cap fees charged to tenants. I see no reason why they shouldn't be charged for referencing for example. If I purchase a property and look for a suitable mortgage, I can be charged anything from £199 - £6000 as a booking fee, depending on rate. So why is this ok and not ok to charge tenants? Cap the fee as say £150 with anything else charged back to the landlord.
Just because someone rents does not mean they are hard-up or have no money. Shelter needs to concentrate on the actual people that need charity and keep its nose out of everything else.
Having tried the usual methods of calling and emailing Shelter it is apparent that Mr Robb has a very effective system of protecting him from any communication that challenges his position. It is almost as if Shelter is concerned for their own existence if the problem of homing those they are campaigning for was solved. Shelter seems not to want to listen.
I appreciate that challenging their statistics won’t ever get a dialogue off to a good start but one should not ignore conveniently contrived figures that appear reasonable and sound in isolation but on a scale of over 3.6 million private tenancies are insignificantly small.
Mr Robb and Shelter are quite simply wrong to lay the entire blame for failing to adequately house the nation at the door of the Lettings industry whether Agents or landlords depending on the campaign of the day. I fully appreciate Mr Robb needs to be seen to do something but by constantly attacking the very people in a position to help him he is self defeating his objective.
There is no legal or moral obligation for private provision to cater for the crossover between Private and Social tenancies. If there is a demand and opportunity to provide Housing to a sector that is not currently catered for, wouldn’t Campbell Robb better spend his time providing that provision, subsidised by the charitable donations Shelter receives, rather than employing a raft of do-gooders to whinge, moan, blame, lobby and polish their own celebrity ego? I am sure Mr Robb will be familiar with the expression “if one wants a job doing, do it yourself” I suggest he pulls his finger out, stops bleating on about how Landlords and Agents are meeting commercial demand and sets to providing the housing his niche tenants desperately need.
What a load of tosh!
We're businesses and are here to make money, not give our services away for free!