Fresh from its success in Scotland, where it has won its campaign to get all tenancy fees comprehensively outlawed, Shelter has turned its sights on all lettings agents south of the border.
Horror stories in the last few days from Scotland suggest that the fall-out has been spectacular, with some agents saying that they are being physically intimidated by tenants demanding their money back, staff resigning and more agency closures.
One agent described the market as having turned overnight, after the Scottish housing minister announced tightening up the law.
In Scotland, premiums were already illegal but the legislation did not make it clear whether admin fees were also illegal. New wording will be put in place shortly, making it explicitly illegal for any and all tenants to be charged anything beyond rent and deposits.
Now, Shelter has announced the results of a You Gov survey into letting agents’ fees, which found that 23% – equivalent to 11m people – felt they had been ripped off by letting agents in England.
The fee that most people said they had been unfairly charged for was for ‘administration’ (14% of people affected), followed by fees charged for credit checks (10%) and renewal fees (8%).
The latest survey, said Shelter, forms part of its investigation into ‘the unfair fees charged by letting agents’, suggesting it is not going to let up on its efforts.
It said that shocking cases it had uncovered included tenants being charged £150 for repeat annual credit checks, which cost the agent between £8 and £25; tenants being charged £100 per viewing and up to £540 in non-refundable admin fees; and agents double-charging fees for the same service to landlords and tenants.
Over half (52%) who said they have been unfairly charged by a letting agent felt the fees were unfair because they were out of proportion to the cost or amount of work done.
Kay Boycott, director of campaigns, policy and communications at Shelter, said: “It’s scandalous that some letting agents are creaming off huge profits from the boom in private renting by charging both tenants and landlords fees that are totally out of proportion to the service they provide.
“With our investigation uncovering unexplained charges of over £500, we need to make sure that letting agent fees are reasonable. With costs like these, on top of the sky-high rents that families already face, it’s no surprise that many dread the day they have to look for a new place to rent.”
Shelter is calling on tenants and landlords to share their experiences online to join the fight against unfair fees.
One tenant, Angelique Atkinson, a renter from Hampshire, paid £540 in administration costs when she rented a home with her partner. She said: “We didn’t receive any justification for these extortionate fees, and ended up having to pay nearly £3,000 upfront, making a huge dent in our finances. I have nowhere I can complain to and be taken seriously. We can’t afford to buy our own home; renting is so expensive that it seems impossible to save for a deposit. The rental market is a horrible place right now.”
Abdul Motin, a landlord from London, said: “A letting agent who was supposed to be renting out my home has ripped me off for £9,000, and we’re now struggling to meet the mortgage. The letting agents falsified the tenants’ references, withheld the rent and deposit from me, and have now dissolved their company. This is the only property I own and I’ll never rent it out again. This has been a living nightmare for me and my family.”
Jane Ingram, president of ARLA, said of the latest stage in the Shelter campaign: “Standards in the lettings industry do need to be raised; that’s why we have long-called on the Government to act swiftly and introduce a robust licensing system designed to protect consumers.
“ARLA has already taken steps to help inform and protect consumers by setting up our own member licensing system to guard against bad practice, and all of our members are required to be clear and transparent with tenants on any charges that they will incur.
“It is important to bear in mind that a professional lettings service cannot be provided to either a landlord or a tenant for no cost. However, both parties should be aware of their costs and feel that they have had a professional service, and should have somewhere to seek redress if they feel otherwise.
“We want our members’ clients to have a rewarding experience in the private rented sector, and that is why we set the standards and requirements of members that we do.”
Shelter – a beneficiary of the Estate Agency Foundation, which raises money for it and other homeless charities – is now calling on tenants and landlords to register online to join its fight against lettings agents’ fees.
www.shelter.org.uk/lettingagents
See also the next story, as Martin & Co fires a shot over Shelter’s bows.
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Comments
@dave on 2012-09-10 17:03:28
Been away couple of days only just seen this response of yours above to mine. Frankly the one immediately after mine says it all.
As someone who as you rightly say was there and was lending on the terms you describe (actually a little above them in terms of multiples) at a rate of £5M a month through 6 offices, there is a little in what you say, but as usual not much.
First thing is forget about 15% interest rates it irks the hell out of me every time someone mentions it. Do you know how long interest rates actually stayed at 15%? Do you know what the average mortgage svr has been over the past 5, 10, 15 and 20 years?
The lenders are not demanding 20%+ deposits becaue, like you, they predict a complete crash in the housing market otherwise they'd be barmy to lend at all. Though unlike you they do not wish for the crash.
Life sadly is a lot more complex that you make it out to be and that includes lending criteria and why terms are set as they are.
Just so you are aware the main reason it was possible to borrow 100% on standard terms so long was not because of the reverse scenario (that banks thought prices would always rise). It was entirely to do with personal status and prospects.
What type of job you had, whether it came with 'guaranteed' annual pay rises, bonuses, commission and so on. That is bonuses and commission as in an integral part of the job and pay package and if you didn't earn them then basically you didn't have the job anyway.
dave you know nothing about lending then or now, stop pontificating as though you do.
I found this
http://www.property118.com/index.php/why-shelters-rogue-landlord-complaints-are-misleading/5998/
What game are Shelter playing? Are they just a bit thick or are they are Guardian readers that think they can get away with publishing any old tripe just to suit their own existence?
I am the real dave
just to recap..I'm not saying there is massive wrong doing in the industry...I'm say that letting is in a sweetspot not of its own making
If prices drop and people are able to buy with reduced deposits then the 1.4 million btl brigade is gonna struggle to find tenants
If the industry reforms itself,then it may have a chance of attracting people to rent rather than buy as a lifestyle choice
at the moment people are renting because they cannot buy
Excuse the change in posting name, no-one needs see my name at the top of every post.
That was an insight "a year-long Housing Voice Independent Inquiry" that had opinions from 60 organisations making 10 emergency recommendations.
So here we have two sides of the same gap, both would benefit from finding solutions and all we are doing is discussing a report that is making exaggerated claims of wrong doing by our industry.
I have no problem with 24 month tenancy agreements, section 8 notices will take care of the bad’uns just as it does now. Perhaps if Lord Larry had emailed Ian Potter then the solution could have been found at much less time, cost and inconvenience to all concerned.
I wonder what other problems and recommendations came out of the 12 month enquiry.
Would you and your mates consider renting if the possibility of eviction is delayed by 18months? I wouldn’t.
Regards
Robert
But then they win Ray. There is wrongness in the industry and the stakeholders are increasingly less informed about how the Industry works. This is the only place where non stakeholders get a voice or have their opinions known.
The Tenancy Deposit scheme is one very good example, less than 2 months prior to TDS in 2007 I eventually got to see what was proposed and what changes were going to be needed in the software. DCLG had come up with legislation that assumed 1 tenant per property, no regards for J&S tenants or HMOs. It was a real battle to even point out that the industry would not operate under their proposals. The Tenancy Deposit scheme is still flawed and biased towards the tenant but more than anything it is TDS legislation that is creating the currently unplug-able gap between Social and Private rented accommodation.
I think we have made progress here this week, Dave has stopped mentioning Japan and I have enjoyed the dialogue with him. Additionally, so far, I been allowed to post without my usual followers.
report suggests private rents should be 24 months
http://www.24dash.com/news/housing/2012-09-12-Extend-security-of-tenure-to-help-fix-broken-housing-market-report
Perhpas shelter should direct their campaigns at social landlords.
Wolverhamptoon Homes who manage 23,210 properties on behalf of Wolverhampton City Council just tried to charge £95 for providing a landlord reference. NINETY FIVE POUNDS! Similarly, Stroud Council tried to charge £45. They said they don't mind if it's the tenant or landlord who pays the fee but someone has to.
The ironic thing is, they only charge it if the tenant is moving to a private landlord, if the new landlord were another social landlord there is no charge!
davidsp wins todays award for the most sweeping generalisation
I'm going to stop coming on here, other than a few enlightened people who genuinely care about what happens in the industry, most of the posts are uninformed drivel or based on hearsay and sensationalist jounalism
Letting agents making super normal profits? brilliant! nurse nurse. my sides have split!
Good luck with your agency mate, but it sounds a bit too much like every other cut price agency offering.
Surely the biggest issue raised by Shelter is that Lettings Agents are making supernormal profits because they can -in the short term - and because, since they are offshoots of Estate Agents, they have no long-term approach to customer service and retention. They are sales-led organisations, not service-led.
The sector is ripe for new independent, specialist property management companies to come in, undercut the lettings agents and finally deliver a customer-centric service - both to landlords and tenants - which results in lower profits, but a more sustainable long-term business model.
Good thing a few of us are looking at the problem and offering solutions.
Not sure where the 1.1million comes from, it obviously ignores the 3.8 million Social rented properties that I know about.
The actual totals are up a tad but the ratio of Private to Social is now nearly 50/50. (3.6 million private), Selling off Old Stock that had suffered from years of under investment, un insulated walls windows and roofs and many with some very suspect construction techniques? Hereabouts the Housing associations and Section 106 have more than replaced what was sold off. The deep economics is that instead of a housing stock that simply costs money HMG now has a stock that is generating Tax revenue and the burden/management of repairs maintenance and insurance are delegated across a team of Managers that are not on the pay role. And should Landlords decide to get out of the game they will pay CGT on the increased value.
http://england.shelter.org.uk/campaigns/letting_away_with_it/take_our_letting_agent_survey
It is very apparent that whoever put it together does not understand that Agents work for the Landlord and are paid to put their interests first.
Emotive question, Do you think the Agent ripped you off?
All in all I don't think Shelter have done themselves or their credibility any good with what is nothing more than an anti- (all) Agent Witch hunt. Quite frankly Jane Ingram should have realised, jumped on and corrected the errors in this press release before it was released and compounded by exaggeration. But there again it is what we have come to expect from NFoPP. No doubt no correction will be issued and Mr. Prisk will use it to justify licensing.
in 80s there were 6 million council houses versus 1.1 million today
I think most people now agree that selling them off was an error...the original plan was to use the money to replace what was sold
hmg would also have retained control over housing benefit and probably general benefits which as taxpayers affects us all
I'm not just blaming agents...the whole thing is a farce...councils paying 900-3000 quid to put people in houses whereas if they owned them the cost would be zero
this current situation is (imo) unsustainable and has to change
I am waiting for a phone call so went and checked out the figures..
23% of a sample of 5379, that equates to 828,000 people not 11 million and certainly not as some are claiming 1:4 of the British public. The actual percentage of the UK population if it were possible or sensible to extrapolate it out would be about 1.4%
828,000 is 23% of the total number of Private rented tenancies in the UK (3.6 million)
In August 1988 falling house prices became a real big issue, the scramble to beat the abolition of MIRAS relief had seen prices leaping up by 10% per month. Then when Mortgage rates looked like soaring in the early 90's there was a rush to get 11% and 12 % fixed rate mortgages.
It is a bit embarrassing to point out, there are not actually 11 million private rented tenants in total let alone there being 43,000,000 so one wonders if that very obvious error has slipped past Kay Boycott what other data manipulations are being used to make their case a compelling one.
Perhaps someone needs to look closely at the You Gov Survey before taking a hatchet to the Agency Industry. The wording and sample taken is very likely to have affected the results.
As for tenants being shy about holding back their opinions Dave, I don’t think that is something I have come across.
The public and private sector are non-competing factions, one's based on entitlement, the other is discretionary.
You can't expect security of tenure from private stock because its not the landlords duty to provide housing, it's local government. We run a business not civil service.
The private sector was intended to supplement the public not join it and definitely not replace it.
There is no doubt that the housing market is in flux and for all we know dave might just be the wisest sage (considering his prophecy I sincerely hope not). Im just not convinced you can lay the blame at the foot of BTL because of it's particular housing law...
gee whizz ray
as if a tenant is going to tell a letting agent what they really think
this is where the problems occur...you can't see the wood from the trees,because you are in the business
I worked in agency in the 90s...if you asked anyone in the late 80s whether they were worried about rising interest rates or falling houseprices they would probably have said no
shelter feel the current format has high fees and low/no security so unless they are making it up,it must follow that tenants think the same
in the real world there is a storm coming the like of which we've never seen before
@ dave
"its the insecurity of private rented that is the problem...ask any tenant...its not a solution to the council houses we sold off,because they offered security
as for the feed...well everyone knows both landlords and tenants are being charged way ott fees and forced to pay them 'cos there is no alternative "
I've asked 'any tenant' as you suggest.
I've asked the first 20 tenants into the office this morning whether lack of security of tenure was a big issue for them. 5 didn't know what I meant so I explained it to them. Of the 20, only 1 tenant had a concern because he was looking to rent for 2-3 years and didn't really want to move in that time. Fortunately he has one of those horrid btl landlords who wants long term tenants so it won't be a problem.
Then I asked them if they thought agents fees were 'ott'. 14 of them hadn't really considered it and just thought of it as a fee to pay for a service. On reflection 3 thought the fees were higher than they expected them but not so much that they would complain.
Then I looked at all of the let only landlords we have on the books, over 70 of them; they seem to have found an alternative to paying us fees; do it all themselves - the same as people who repair their own cars, decorate their own homes, make their own bread, grow their own veg, make their own clothes. landlords and tenants use agents because they choose to, not because there is no alternative; they simply don't want to put the effort in to use the other alternative.
If interest rates had stayed at 5 or 6 % and Mr Brown had not of mentioned then U turned on SIPS in 2005 then the 2005-2008 blip in prices might not have happened and the Telegraph, Radio 4 listeners would not have been educated about an alternative pension provision that they could control. When the banking world imploded it was only natural that the educated and wealthy amateur was going to look around to look after themselves and their own. I am not making comment on the rights or wrongs of that just mentioning a part of the market no-one else seems to acknowledge.
You asked Is it right that a Doctor on £50k rents from a BTL landlord who has a base salary of £25,000? Ask the Doctor! It is nothing to do with me, you or society, one could argue that the Doctor is denying someone else on a lower wage the ability to rent an affordable home.
The bit that is broken is the belief in the "right " to own our own homes at the same time as having a big telly, a new car, 2 holidays a year and all the material stuff that was a consequence of cheap and unsecured borrowing. Although interest rates haven't gone up most people can not afford all the stuff they got used to buying because they wanted it rather than needed it
There isn’t a pressing need for licensing of Landlords or Tenants, a few minor tweaks that I know are being considered and developed and I think the industry and market will gasp at how simple it all was.
I am not being patronising but thank you for the different posting style.
its the insecurity of private rented that is the problem...ask any tenant...its not a solution to the council houses we sold off,because they offered security
as for the feed...well everyone knows both landlords and tenants are being charged way ott fees and forced to pay them 'cos there is no alternative
rented market needs to get landlords licensed and perhaps tenenats too
robert
the whole housing market is totally dysfunctional and unsustainable
had hmg left interest rates at 5.75% the market would have fallen 50% like other countries and the renters would be buying
read between the lines...average age of ftb closing on 40 years old?
something big is gonna happen imo and its going to be very very nasty for anyone over exposed to mortgaged property..and there are lots of them
doctors on 50k competing to rent a box from a landlord on 25k....unsustainable
In a way I agree, 0.5% interest rates are the reason why seniors with money would rather take a 5% rental yield with an investment that can be passed on to future generations than trusting it in government bonds or with an FSA regulated investor.
What the government are doing with quantitative easing has little to do with the housing market other than ensuring that they aren’t faced with an even bigger bill and greater demand for social housing.
There have been less than a dozen cases that I can recall from the last 18 years where the Private Letting industry could be accused of wrong doing. Sure Landlords and Tenants have complained about fees and service but that is not widespread and the level of competition in the industry means those landlords certainly have a choice of agent. High and increasing demand for rental properties means that if for example a tenant wants to live in the London commuter belt but work locally they will face stiff competition from other tenants with much higher means. It is hardly an Agents fault that the demand pushed rents don’t suit all tenants but it shows a lack of maturity to blame agents for their fees and advice to their clients.
Bringing this back on topic, the Private rented sector on the whole works and works well but there is a gap in provision for those who are just above the threshold for fully assisted housing.
unfortunately the truth can be boring
my view is that the lettings market is not fit for purpose and the shelter campaign hightlights another area where its not fit for purpose
If you cannot see that the housing market is being propped up by 0.5% interest rates,forebearance and QE then I think you have a problem seeing the wood for the trees
exactly dave, another thread spoilt. Did you even read the headline?? this was about shelter slamming agent fees after their success in scotland - you chip in with your normal boring diatribe about how the btl market is dead (it isn't) how it will all turn out like Japan (it hasn't) and how your kids will save the world economy by buying a btl portfolio house on the cheap.
Its boring, you're boring. change the record.
This was a subject that deserved more "on topic" debate so it a shame that it has been hijacked.
Dave of course you are entitled to your opinion and make valid points but they need to be at least connected with the subject otherwise you stand a chance of not being taken seriously.
Address the point...
"one of the problems over the last 10 years is the crushing of views different to vested interest"
That is a wonderful sentence that says nothing at all, without saying what the vested is, and who crushing the views it becomes just a sound bite.
I have had a direct commercial connection with over 40% of the country's Property Management and Letting agents and have a better understanding of what is and what isn't going on in this industry than most people. The vested interest over the last 14 years that I can see was BTL followed by PFP (property for pension). With interest rates on the floor and with a Banking and Investment industry no sensible person would trust please explain what anyone with a pot of money they have earned and saved ought to be doing with it.
The whole thing about your particular theory, which I notice you managed to shoot a hole in yourself yesterday, is that you do not seem to understand how prices are not being propped up by government or quantitative easing but silver haired investors that will not be selling up their one or two PFPs just because they fear a crash in prices or a sudden drop in demand for rented property. Those properties will just find their way to the children or grandchildren and with a bit of smart inheritance tax planning not a single penny of tax will be paid.
This of course is off topic, I know, but any useful discusion of tenancy fees is already well out of the window.
another thread spoilt?
why...try to argue the point not the person
one of the problems over the last 10 years is the crushing of views different to vested interest
Another thread spoilt! time for Ros and Nat to act!
you mean I'm a narcissist ATTENTION seeker,who drinks alot
thanks...I'll take that as a compliment
at least you don't think I'm george soros hiding behind 'dave'
trying to collapse the housing market on this free internet board
With all that experience of debating and Blogging what is the word for someone who contradicts themselves, is woefully inconsistent and posts deliberately provocative stuff just to get a reaction? You know what I mean the internet version of the pub bore!
wow...I feel honoured you think of me like that...perhaps I'm a secret hedge fund manager from mayfair coming on here trying to talk down a market worth trillions
or perhaps I'm just a debater/blogger on a free internet site
@industry
in the 90s you could get a 100% mortgage with interest rates at 15%...its just it was only 2-2.5 x your income
the other 25% was hedged off and you paid a mortgage guarantee premium
you should know this...you were there...also,there is plenty of money boe printed 80 billion to lend a few weeks ago
a large deposit is required because banks think price are going to fall
@Industry Observer
I think it was Dave who was Poo Pooing 5% BTL yields a while back, then here today is making a very good case why HPC won't happen.
My take on his posts is that he is just trying to agitate things. On one hand trying to convince folk not to buy because of the looming crash then trying to unsettle the BTL landlords on here with prophecies of doom. Perhaps being all informed and matey with a banker dear old Dave is trying to engineer a Bear/Bull market that he and his mates can benefit from. After all if there is no crash they won’t be able to buy at the bottom and won’t be able to ride price hikes above inflation.
All this yadda about a portfolio he knows about! who admits to having a portfolio like that? Either he is seeing or being told about stuff he has no right sharing or he is making it all up to support his latest thinking.
Badly informed, making things up, no idea of the industry… Perhaps it is Shapps or one of his advisors after all who else would spend so much time on a property forum
dave
I knew it couldn't last - my support for one of your views on EAT!!
I have told you before and will say it again to you and all hpcers or anyone who wishes for VASTLY lower prices so they can but.
What with?
If you were say Nationwide and had seen the bottom drop out of the asset side of your balance sheet because prtoperties are not worth what they originally were - and a long way from oit - would you be looking to lend hand over fist to the tens of thousands you seem to think will be queuing up to buy?
dave in that scenario the economy will have gone to hell in a hand cart, not just house prices. As I have repeatedly said before the only peop0le who will be able to buy will be cash buyers. Not hpcers who think their boat has just come in. And not disgruntled tenants ot ex tenants weaiting to buy.
The finance isn't there now dave unless you have a minimum 20% deposit and an impeccable credit history. What makes you think if prices crash that lenders will be falling over themselves to lend - against depreciating assets?
Whoever asked where this lost generation of 21-40 year olds were going to go when they levae the Uk made a good point.
And stop saying things are going to happen, then backtracking and saying "likely" etc.
Either stick to your guns or put them away.
just giving the facts...often on btl portfolios,the figures stack up on paper,but don't deliver in fact.
maintenance on flats,arrears and repairs all add up
I'm more surprised that you are surprised
Which part of the country are you in Dave? Even if this person you know has got a 5% borrowing rate that is still only £5400 per month in interest. Her rents must average just over half the national average in order to be £1000 short each month. I cant imagine a place where it is possible to spend the national average to buy a place yet the rental market is so poor
A bit more detail might help but that is an example of an amateur If her figures are correct then that portfolio is one of the most laughable I have ever come across and certainly one that no agent worth their salt would ever take on. Whoever advised her or lent her money deserves all that is not coming to them.
thats 1000 pounds short
I'm not saying that is gonna happen in the uk,but we are in uncharted territory.
what I find here is that no-one sees the risks staring them in the face
I know someone who has a btl portfolio of 10 with a 1.3 million pound mortgage...shes just had her portfolio revalued at 1.2 million
she's also short 100 pounds each month versus income
how many are in positions like this?...and thats with 0.5% interest rates and massive QE
You obviously know or have read a whole lot about Japan. Where did the lost generation go to?
If there is a mass evacuation of 21-40 year olds from GB where would they go?
Europe will just be a warm version of the same problem, Oz? they hate people that whinge.
USA? even more ruthless on nay do wells than us.
Canada? probably take the cream of emigrants, those that haven't already gone there
New Zealand.. only Scots need apply.
A generation too scared to rent and too scared to buy are hardly the globetrotting risk takers needed for that prediction.
Are there a lot of Landlords with empty properties Ray? Around here I can only think of 2 properties that look as if they are empty, one of which I know is actually occupied by someone who doesn't go out much, but 2 is well short of the number claimed for the region.
Letting to Housing Associations and Local Authorities need not be a problem and there should be nothing that prevents landlords or Agents considering any tenant. Because the stakeholders are entrenched in their traditional ways of working and traditional attitudes, compromise that would make the whole system function never gets discussed.
An agent and their landlords that move to the middle ground ahead of their competition are more likely able to direct and influence change than those who lock horns with the organisations they should be working with.
on the face of it it would seem so,BUT the only real example is japan
they had zero interest rates and printed money ...in fact at one point they gave everyone about 4k
but property is still 40% less than 1991 and the stockmarket is 75% lower
oh and the kids left the country and the population decreased to 1950s level
the same is likely to happen here
..... you have just made a great case against HPC.
I believe I'm right and you believe you are right...so what?
the so called 'experts' all have a vested interest
the fact is that interest rates are 0.5% for a reason and we are printing money for a reason
things are very very bad
sifting out the valid points is quite simple as they are very few and very far between; its his steadfastness in believing his opinion alone amongst all others, inc financial experts, housing experts, the industry, the government, bank of england etc etc is the only correct view that is so irritating.
The truth is, and what dave simply chooses to ignore or may be simply doesn't understand, is that the social housing system we have in the UK is in adequate and already bursting at the seams. Dave wants his cake and to be able to eat it too; the eradication of btl landlords just so his kids can buy a house when in fact if the private rental sector is destroyed the social sector would also implode and the governement would need to take emergency steps to provide housing. That could mean forcing landlords with empty properties to rent them to the local authorities; its more likely his kids will be council tenants than homeowners
I really don't think you get it...its not whether it will happen or not its the insecurity of knowing you COULD be turfed out with 2 months notice for no particular reason at all.
with social housing and owning you are in control of whether you keep your property
when ever they can afford it,renters I've met vow never to rent ever again
its this fact that (imo) will destroy btl and the rented sector
6 month Assured Shorthold tenancies that automatically become periodic tenancies are the norm Dave.
It isn't in the landlord's interest to keep switching tenants because the expense of re-letting, refurbishment and the risk of a void period created between tenancies soon eats into the yields of letting. Low risk – Steady returns doesn’t become High returns if one plays the high risk game of upsetting good tenants. There are people playing a High risk game with lettings, a game that should worry them as much as the tenants. The trouble is very often neither Agents nor Tenants will know who they are until it is too late.
Tenants that pay their rent on time and look after the place as if it were their home (not a hotel or reality TV experiment) have very little worry about from a professional landlord or a professional Agent. Problems begin when amateur or accidental landlords decide to do without the services and guidance of an Agent.
@Ray, I wouldn't give up on the debate that easily. If we sift out the valid points Dave has make and disregard the anecdotal and deliberately provocative stuff then we stand a chance of our opinions being heard.
6 month leases with 2 months notice?
many landlords are giving notice on the day of moving in
what planet are you on...had the government allowed markets to work then prices would have collapsed 30-50%(more for flats) and our kids would be buying distressed property
whats happened is hmg have propped up a bubble at the expense of a whole generation
the consequences of this unknown
people with large portfolios (mortgaged) have been lucky not clever
our kids of course are the very people who will grow the economy
well done dave, another healthy debate hijacked by your rantings
I would be interested to know why you think (presumably private) Letting is insecure and how it differs from social housing.
It is not correct to say that things have to change dramatically or that the current system is not fit for purpose. The changes required are minor (and sensible) if implemented across the whole industry and rather than being punitive on Private Landlords and Agents are actually fair to all.
Imagine what the housing crisis would look like today if the social provision of housing was not being underpinned by professional, amateur and accidental landlords. The extremes of the spectrum would be catered for but a million or so normal working families would find it even more difficult to find a home.
Like it or not Private landlords are filling a gap in the market that government policies have created and only by the two working together will there be any chance of stopping the gap becoming increasingly less equitable.
letting is insecure
social housing has security
it has to change dramatically as currently itis not fit for purpose
@LettingReformation
What are these "Agancies" you are referring to?
Whatever they are I bet they are very worried about your impending attack!
The agencies market needs to be revised and WILL be. They had too much room to squeeze money out of tenants and landlords. The same will happend as it did in Scotland.
In east england we are already organising the next attack on the agancies...many offices will be closed!
The ball is rolling and can not be stopped.
LettingReformation
most opinions people don't like are inflamitary
there is no doubt that people who should be able to buy who earns 50k per year,is paying the mortgage of someone with a porfolio of property who may be on 25k?
btl and historically low interest rates have stopped a whole generation(who are the growers of the economy) from partaking in society
had the bubble been allowed to burst then we would have taken the pain and moved onwards and upwards
as it happens its worse than 2007 and there is no longer a fix...the outcome of such policies are unknown,however,japan did the same and property and stockmarket fell 70-75% over 20 years
@Dave, I am not trying to stifle debate but when inflammatory statements like "after all tenants are paying landlords mortgages half the time " are thrown into the debate, such statements are unsubstantiated, get in the way of the discussion and add nothing to the discussion.
You might have valid points to make but if your posting style is sniping and confrontational then you very soon end up debating with no-one but yourself.
It might be inevitable that the costs for these services are passed to the landlord, after all its the landlord that requires us to carry them out and not the tenant.
Given the amounts involved that reasonable agents charge, increases in rent, if any, will be minor. Others, whom like me charge anything up to £100 should not find it too difficult.
In a competitive market place this was only ever going to work with mass adoption and if Shelter succeed it will be law so half our job re-educating landlords would have been done.
We're not losing revenue just re-assigning it and we're not responsible for the change, the government is.
A good agent with a robust business model will easily handle this and you can draw your own conclusions about those who can't.
Most landlords use agents because they have to, however the successful agents are founded on the quality of their service, not price.
I think we can take this in our stride.
I would suggest the 'same old arguments' are applicable here
It shows the great replacement for social housing is simply not ftr for purpose...low security and extortionate fees.
When prices fall any one who has ever been exposed to rented accommodation will flock to buying rather than renting
as said here...the rented sector need to get their act together like european countries....long leases(5 years available),fair fees/no fees and reasonable rents
stop trying to control debate and freedom of speech
@Dave, in the interests of not frightening off posters who might otherwise take part in this discussion please could I request that the usual arguments are not bought into this particular thread?
Discussion and dialogue is needed on this subject and it isn't helped by unsubstantiated mud slinging.
I have been at this a very long time and have been privy to most every type pf Property Management organisation, their method of operation and their fee structures. My job is looking at the problems and processes in Property Management , finding solutions and suggesting improvements.
If you are after the usual chat with the regulars and anonymous posters there are plenty of other threads to choose.
Many thanks.
My opinion is that Agents would do well to work with Government and charities like Shelter to come up with a framework that works for everyone.
One of the things I know for a fact is that the very vast majority of Agents are good honest people with a genuine social conscience. That majority do not rip off tenants and do not rip off Landlords. Government and Shelter are not on an anti agent crusade but are seeking the get a fair deal for tenants who have no-one else to fight their corner or offer them advice. It seems sensible to sit down and decide how the Private provision of accommodation can better work with and help fulfil the requirement of Social Housing.
A business that latches onto the potential of working more closely with the social sector will more likely benefit than an a Agency that pulls up the drawbridge and ignores the benefits that would be possible from a system that bridges the existing gap between Private Supply and Social demand.
I have put a few years work into a how to provide a solution to this problem and think it is about time our industry goes to Government with a proposal that works for Agents, Landlords and Tenants. It will require change and compromise on all sides but I think that we would do well to have a stake in the change rather than have to accept changes that are less to our liking.
tenants have been ripped off left right and centre
letting agents charge the landlord one months rent....that should include all tenant fees
after all tenants are paying landlords mortgages half the time
mind you,as prices plunge and ftbs buy rather than rent...landlords will be begging tenants for their business
It's very unfortunate that this has happened, especially as I believe that Shelter really and genuinely don't understand the market overall.
Stop potential tenants having to pay for legit administration duties and make the landlord pay? The landlord will quite rightly ask for a higher rent.
It's a fact of life: there's "cowboy" operators in every walk of professional life: you can't stop them though by making ridiculous and sweeping changes, bringing in a law that has the potential of damaging a whole industry irrevocably.
What's going to happen when it "all goes wrong" in Scotland, they have to reintroduce admin fee's and there's hundreds of thousands of properties with tenants sat in them who sit tight and say: "get stuffed, we're not paying"??
I think this needs to be better thought through Shelter!!
Having only charged £35 inc VAT for my references and no other tenant fees whatsover over the last 12 years this new legislation is a breath of fresh air.
In Scotland we now have an even playing field and no longer will my business require to compete with 5 & 6% management fees charged by unscrupulous Agents. Why....because they can no longer make up their margins by charging ridiculous fees to Tenants.
Finally Landlords will require to select their Agent by quality of service, professionalism and integrity...not whose the cheapest by the way.
EUREKA Its just come to me.
If Shelter are so against agents charging for references etc why dont they set up a referencing dept. that us agents can access for free and then they can offer a rent guarantee insurance at market rates to back up their referenicing services.
They can also provide us with a free inventory service so this will also keep the tenants costs down.
I wonder why they might not think this is a good idea? Wouldn't be because it would cost a lot of money to administrate would it, The same it does us agents?
Industry Observer, I seriously doubt you have ever run a succesful long term business if you dont even know how much you earn!!!
What ever happen tenants will end up footing the bill so Shelter need to look very carefully at their own suggestions.
I wonder if Shelter would like to come up with a suiggestion for compensation for all the tenant applicants that totally waste an agents or Landlords time?
I feel the present system is fair and tenants do have options of which agency to go through if they feel an agent charges to much.
Service has to be paid for, we cant all be funded by the state. As mentioned in an earlier post, if someone gets something for nothing they abuse it and dont appreciate it.
@ why always we
Good point - we tried getting tenants to take out their own credit referencing for a while with one of the major reference providers in exactly the way you suggest in an effort to reduce their costs and our administration costs/burden.
What a fiasco!
We spent more time chasing applicants - thus more cost to us - than we did when we did it for them. They would select the cheapest option when told they had to take the full reference to be accepted; they wouldn't complete the forms properly; they would try to change the results, it was just a nightmare.
Trying to get a uniform reasonable fee agreed by all agents is next to impossible for the reasons you give; equally it won't work if we have to charge the landlord and he ultimately adds it to the rent unless all landlords increase rents to the same amount.
There is no simple answer to the problem and anyone who thinks it is simple is barking mad and should work for shelter
Our Industry is a business, not a non profit organisation, we're agents not the local council. Fees reflect the administration costs of running a business and not soley the cost of the actual transaction.
Its natural agents fees differ as they're based on individual business models. Whilst some agents fees are steep, In a business environment they are at least entitled to make some level of charge.
If agents are not to charge for services then services should not be offered. Let the tenant directly contact the Credit Agent to carry out the full checks & referencing then send us a link to their file, the tenant pays them, not us.
A blanket ban on all fees is a restraint of trade and whilst well intentioned, Shelter should recognise that tenants must accept some costs when applying for private sector housing.
Trying to govern a free market by dictatorship never ends well...
@ TheWokSmuggler, Rooster, Steve From Leice4ster and anyone else.
In response to various comments.
I have run a lettings agency
I also run a business now, and know well enough about hidden costs, overheads, extras and above all now, free advice!!
I do not doubt that charges need to be made. I do not doubt that services nmeed to be paid for. My point is that had agents not started doing something in Jockland that they were never authroised too pigeons now coming home to roost would not be doing so and crapping all over them.
The point is that the charges have to be fair, reasonably balanced and above all crystal clear and clarifies in a tariff of charges up front. As oper OFT pronouncements under UCT etc.
Then thew questiuon is who pays for them? I accept someone will - but as it is the Landlord who wants tenants referenced, an agreement, an inventory etc there is at least surely an argument that the Landlord should do so - or at least in part.
Finally Wok why would I have a grudge against agents when my job is to support them? And try to prevent them ever ending up in Court for whatever reasons themselves or for their clients?
End of posts on this one, it is a waste of time anyway trying to debate anything with anyone with a closed mind or a vested interest. Agents have a vested interest in maximising charges because they are in business to make a profit, of course they are.
As usual, and as always with estate agents, letting agents just want to be left alone to get on with it. All well and good if everything in the garden is rosy, not so good if it isn't though.
Shelter has an agenda; it opposes private sector renting in principal. Whether or not the charges made are legitimate or reasonable is irrelevant. The objective is to make the private rented sector unworkable so the problems produced in Scotland are a Godsend to them. In their lights it proves that the existing system is corrupt and doesn't work. The greater disruption the better in other words.
The only way to combat an organization as powerful and respected as shelter is for the industry to take a long term view and create it's own publicity organization to match. And there is no point fighting defensively on individual issues because that leads to a death by a thousand cuts. An extra charge here, an income source closed there, an extra obligation on top, a little tenant benefit under the table and before you know it you are out of business.
I liked Rooster's points - there's a person who knows their business inside out and cares passionately about it.
Shelter's campaign is as daft as saying supermarkets shouldn't be allowed to make a profit out of people's need for food.
That's quite a good analogy because food and shelter (oh the irony) are both essentials. The only difference is that the consumer has far more choice about who they rent a house from (and therefore what fees they pay) because lettings is a heavily fragmented industry sector whereas food is dominated by the Big Four.
@IO - you seem a very bitter and twisted individual that harbours grudges against agents. We charge £192 for referencing and administration fees for a couple's application. They pay no other fees prior to signing a tenancy. As we state it is non-refundable it is amazing how many peoplew who seemed quite keen suddenly change their attitude as they discover that we are going to carry out proper checks on them. If these charges were banned then agents would be faced with huge numbers of potentially duff time wasters with no chance of gettingthe costs covered. We get the tenants to sign Terms of Business that outlines all costs they are likley to face during a tenancy before we process the application. Can you please explain what is unfair about that? The tenant wants a property - we provide the tenant with a service.
By the way Shelter's figure of 23% dissatified or ripped off means that 77% are happy and by their figure that is 47,826,000 are happy. That seems a substantial majority - is this the tail wagging the dog? Also by their figures it works out that 82% of the population live in the PRS sector - surely this is not right?
Blatant mis-use of statistics
The tenant will end up paying the costs whether upfront, or hidden in the rental payments. At the end of the day tenants and charities can moan all they want but there are costs involved for the services and expertise.
I keep all fees upfront and fair with both landlords and tenants. I don't double charge. Our rental commission included all contracts, deposit transfers, inventory liason and check in & out as complete package. The only extras the landlord pays is for the EPC and inventory clerk.
The tenant pays a fair reference check fee per signature on the contract. We charge £75 per tenant, and that includes everything through to their moving in. The only other cost to them is the check out inventory.
I prefer to keep things simple and have had good feedback about this from landlords and tenants. No company can do things for free, but the key is to not rip people off, then you make the money on repeat business referrals and renewals.
We employ a full time administrator who earns £25k (so add tax on top of that for employing her in the first place!!)
Our admin fees per tenant are £85 each. On average we earn £30k on admin fees over 1 year from al the lettings we carry out. And so if we cut our admin fees, how would we be able to employ her in the first place!!!!
Edwards,
LSL do not trade as Whitegates (Legal and General) and Belvoir are not one of the two biggest.
Nice idea though.
if you examine the figures of the biggest two players in the market namely LSL Property Services (T/A Whitegates) and Belvior Letting their forecast dividends are 4.4% and 7.1% respectively. Assuming that independents are making much the same its about £5.75profit on each hundred pounds paid which can hardly be called a rip off.
My last post on this matter, until the next time! ;>)
How much should be charged for a service and who should pay is debatable.
However, ANYTHING that is FREE will eventually be "abused". Paying a reasonable fee makes people 'think' and act responsibly.
Quite a substatial number of potential tenants give incorrect information (not always intentionally) or even lie about their credit history etc. and they do not care, or take care, if it costs them nothing to do so. Some keep on until they 'con' someone - especially in these difficult times.
Who pays for this, very often considerable work, if they do not?
Rooster on 2012-09-06 11:02:26 has a good point, even if over detailed! ;>)
Prevous post was a response to Industry Observer. I'm too trigger happy.
At no point did I question your credentials, just your understanding of costs of running a lettings business.
Yes, I could be accused of having thrown in "everything including the kitchen sink" but this is what you have to do as a business owner. There is no magic pot of money - ALL costs have to be covered if you are to survive, let alone make a profit, so I'm not sure what your point is. I could of course have also included electricity, IT costs, portal costs, public liability/indemnity insurance, uninsured liability costs (as detalied earlier), buildings insurance, IT costs, office cleaning, office maintenance, banking costs (horrendous), rent, business rates, annual anti-money laundering fees, annual data protection compliance fees, annual ombudsman fees, newspaper advertising, motoring costs, etc. The list goes on and on and on. If customers, whether tenants or landlords, want to use a high street agent - and they clearly do - then unfortunately they must pay for the service. And a service is made up of costs. So long as they're reasonable then there is nothing inappropriate.
As a self employed consultant you have business costs, including your mysteriously unknown income. If your fees are less than those costs then you will not be able to survive.
I agree that charging £300-400 pounds upwards for tenancy processing is obscene, but most agents do not charge these scandalous fees. However, anyone who thinks that charging £60 (not £70 as you misquoted) for a diligently processed tenancy renewal is too high clearly does not understand the realities of running a business which employs staff and operates premises.
Industry observer - one wonders with all your experience why you haven't run your own agency.
Have you heard the old saying Those who can't, Teach!!!!!
Rooster - excellent post. You charge similar fees to us for a renewal and we follow a similar process on the renewal.
I would just add in we also review the rent at each renewal and negotiate increase where there should be.
@ Rooster
Have only seen you post occasionally before, so you may not have seen my various justifications for positions I take on various issues. Which is, I hope, as an honest broker.
Rooster I'm probably much older than you so a bit of friendly advice - never question anyone's credentials unless you know.
I was with NBS for 23 years ending with 2 years as National Rented Housing Manager.
Left in 1994 and then spent 17 years with a national franchising company. Hence my knowledge of what fees agents charge in an awful lot of UK locations.
Since late llast year have been a self employed consultant.
I have no idea what I earnm and don't care as I am not money motivated. But either way what I earn has nothing to do with you or this debate.
Speaking of uninformed you miss the point entirely as is everyone else contributing from what I can see. I do not say do not charge. What I question is how much and above all, who chould pay.
You charge the Landlord for a renewal - fair enough. £70 in my view is still far too much and justfiied in your exampe only by you throwing in everything including the kitchen sink.
One thing you omitted though was costs of serving fresh PI information on every renewal AND if the tenancy goes periodic. Just mention this in good spirit and to show you I do have a vague idea what I am talking about after 20+ years experience (not one year 20 times!!).
Like many organisations, Shelter has no experience of real business and as always must find ways to justify its existence.
We are in business for 10 years. Never charged any letting fee whatsoever to tenants.
@Industry Observer, "What exactly is involved in a tenancy renewal?" You have a clear lack of knowledge of the issues involved, and the potential liabilities arising from an incorrectly renewed tenancy.
For tenancy renewals we charge the landlord £60, and the tenant nothing, whether it is a 6, 12, 18 or 24 month tenancy.
Our process (assuming the tenant wishes to renew):
1 - Call or email the landlord to determine if they wish to renew
Cost to us: Staff time to type email, or make phone call, and cost of call if appropriate
2 - Assuming they agree to renew, we send two copies of our Terms and Conditions to the landlord. This ensures that they are always aware of our terms.
Cost to us: Staff time to create a new tenancy on our system, 11 pages of A4 printed on a colour printer, envelope, postage, return postage paid envelope (10p) and return postage (50p)
3 - If the tenancy is to roll on to a Statutory Periodic basis and the tenant required a guarantor, we contact the guarantor to get their agreement to support the SP agreement, as their obligations ended when the AST ended, and then send a letter for them to sign and return
Cost to us: Staff time, Printed letter, envelope, postage, return postage paid envelope (10p), return postage (50p), liability
4 - Prepare two copies (min.) of tenancy agreement and send out to the tenants.
Cost to us: Staff time, 22 pages of A4, envelope, postage, return postage paid envelope (10p) and return postage (50p)
5 - Chase tenant and landlord to sign and return their paperwork. This is required in around 70% of cases.
Cost to us: Telephone calls, staff time
6 - Check signatures on tenancy agreements against those held on file. We have had cases where they had been forged on behalf of guarantors.
Cost to us: Obvious
7 - Sign tenancy agreements and then send them back out to tenants. Arrange renewal of AND PAY FOR Rent Guarantee Protection insurance - appropriate for most tenancies. Convert pending tenancy to a live tenancy on our system. Generate Section 21 document(s), ensuring that they are thoroughly checked for accuracy. Send email to landlord to confirm renewal.
Cost to us: Staff time, envelopes, postage, printing costs, payment of insurance on behalf of landlord.
Our costs detailed above may appear - to the hard of thinking - to be minimal, but just as an example a colour toner for our printer is £120, and each colour drum is £70. To refresh the consumables for our main colour printer, which has been done in the last month, is over £700. Oh, and we had to buy the printer in the first place. And we have to pay to have it repaired when it fails.
Similarly, we pay BT for numerous ISDN lines, telephone calls, maintenance of phone system, broadband, etc. The staff sit at desks and on chairs that we had to buy. And we've tried to change their expectations on this matter but they STILL want to be paid a salary. Every month. On the positive side, we do have the privilege of paying National Insurance for the honour of employing them. My favourite though, is being able to pay tax on any small profit that we might actually make.
The biggest cost of all, regularly overlooked by the uninformed - and I'm looking at you IO - is the massive financial risk we undertake in doing this. If we word the tenancy agreement incorrectly, or too loosely, or if we serve an incorrectly detalied Section 21 document, WE would have to pick up the pieces and bear the costs should things go wrong later.
I would be interested to know what job you do, and how much you are paid per hour.
Incredible - Lets not mention fees charged by Banks, Solicitors, Insurance Companies..... and the list goes on.
I recently spoke with a landlord who 'Wanted To Save Fees'... he's now facing financial hell following the move-in of a tenant set to avoid paying any rent....
His cost to date - £13,000 - all from a percieved saving of an agents fee. LOL
Shelter - My Donations End HERE!
@ Jon
Why won't the business model change? Of course it will, if the fees are justified. As posted below this is the real nub of the problem and where all navel gazing needs to be directed on this issue.
You sound as though you charge reasonable fees - I can assure you from over 20 years experience the vast majority of agents do not and charge Landlord and tenant for everything undfer the sun and usually at vastluy inflated levels of both cost and frequency.
EXAMPLE
What exactly is involved in a tenancy renewal? An inspection visit that should happen anyway, a call to the Landlord to check he still wants to let, and then amending one page or two at most on the core terms of the tenancy, and getting it signed.
Is anyone seriously telling me that is worth £75 every 6 months, which is what most agents now charge?
Mainly to the two Rays but to anyone else who thinks agents and Landlords are going to pack up because of this.
First there are only about 8 things you can do with a property, which include living in it yourself, ditto for a family member, renting it out, converting it to flats, developing it some other way, leaving it derelict or selling it.
Now why are Landlords going to do any of the above just because some fees paid (wrongly) by others are going now to be charged correctly (if at all) to Landlords. Rents will increase and if it is all across the board where is the difference? The tenants save on fees and pay higher rents. As long as the two do balance i.e. no crass stupidity in trying to charge an extra £50 a month for 2 years to cover initial fees of £500, no-one will be any the worse off.
@Ray Comer the wording and intent of the legislation is clear and always was. Ambiguity accusations are levelled by those trying to move the goalposts and raise charges they should not be. Just as the deposit definition is very widely drawn, so is this charges in coinnection with the preparation and renewal of a lease. IT MEANS ANY CHARGES NO MATTER HOW LOOSELY DEWSCRIBED AND TENUOUSLY LINKED.
TYhe idea is the vendor or Landlord pays all fees. Simple.
@ Ray Evans - not often I disagree with you Sir and I am astonished you are so easily swayed byt various silly comments elsewhere about agents leaving in droves, and Landlords stopping letting and so on.
It will not happen - the market will simply adjust back to where it used to be and always should have been, and the sun will continue to rise in the east and set in the west as it always has done, even in England.
Seems to me everyone is asking the wrong questions and pointing foingers in the wrong direction i.e. at Shelter.
The real questions, as I have posted elsewhere, is how on earth does any agent justify for example £400 to reference 4 tenants. You think that is rare - I can assure you it is not.
We base our fees on what it actually costs us to do the work we do. Our office and manpower overhead is easily £45 per hour, add to this some profit and £60 per hour is not unrealistic.
Just like car insurance, the good applicants subsidise the Liars, Cheats and No-Shows that we all waste time on.
We do not use cheap referencing and we do not use it as a profit centre. We don't sign applicants up with an 'application fee' that includes referencing, we try to be transparent in all of our dealings. Without spreading the cost burden between the incoming tenant and the Landlord the business model simply will not work.
Cowboy Agencies set up and advertise unrealistically low fees to Landlords then sting tenants giving us all a bad name.
Local Authorities simply cannot handle the fallout of agencies being forced to close. My margins are already tight enough. Government beware!!
let us control the market by weighting it in favour of all tenants simply to help out a few that the failure to provide adequate social housing is letting down.
Of course Shelter can play the "social concience" joker of helping the poor and needy and government are happy to hide behind that for the will will both ways.
Place more of a burden on the landlord and what hapens rents across the board will be driven upwards by; 1. some landlords deciding "stuff this for a game of soldiers" 2. increasing rents to cover the charges passed onto them.
When demand outstrips supply it needs intelligent thought rather than Grauniad, Pinot Grigio influenced, Diner table bwilliant ideas.
I think government will be watching Scotland very closely at the moment; if the stories about agencies closing down in droves is true then local authorities will be placed under huge pressure as tenants look to them for housing. Our government will avoid that like the plague and if that means leaving the fees alone, thats what they will do.
@ IO - its not ambiguous when read in context - no fees in connection with preparing or renewing a lease. But agents have been careful not to charge for that but for the other work involved; referencing, check ins, etc. It becomes ambiguous when an agent argues that charging someone for references is nothing to do with preparing a lease; yes its connected in the process of arranging a tenancy but is it directly part of preparing a lease i.e. the tenancy agreement itself? probably not.
That said I would love to see a cap of some sort introduced on fees to stop the cowboys.
A repeat...
Another pronouncement from those who would seem to know nothing of running a business or an understanding human nature.
In my view the bottom line is that SOMEONE has to pay a fair price for the actual services provided - Will Shelter? The Government? I think not!
It will be the tenants in the form of increased rents - and that only if properties are still available.
I do not support the use of tenants security deposits for anything other than failing to comply with their obligations under the aggreement. However, there is a cost to everything and tenants should bear their FAIR share of fees for service incurred (often legally required?) on their behalf. Shelter obviously think not, as is usual for organisations such as this!
In my view just some of the effects...............
1. Landords costs will increase because they will have to pay for everything. Of course tenants wil love it - among other things they will not have to pay for any of the work, especially abortive work that is usually due to "incorrect" information supplied by them. It' will be a "liars" charter.
2. Many private landlords will just get out of the market.
3. Less property will be availble and what is available will be more expensive to rent.
4. All responsible tenants will pay more via their rent
Think on Shelter!
P.S. I do not expect all to agree for we increasingly live in a "something for nothing" society.
Agents should be required to make any and all their charges to tenants clear before the transaction takes place.
Then the tenant should be able to choose.
Or have we moved on from a free market now?
I hate to say told you so but I have been warning about this for years. Any agent over reliant on Landlord and tenant letting etc fees instead of just the management fee is going to find life financially tough in a few years when similar restrictions are also introduced in E&W as they will be.
".....but the legislation was not clearly worded..."
Can someone tell me what is ambiguous about this...
It is an offence to charge a tenant any fees in connection with the preparation or renewal of a lease.
Now is that badly worded or obscure? Read the Statute and there has been plenty of published comment confirming it has always been illegal to charge these fees TO THE TENANT.
ARLA as usual behind the curve. What has licensing to do with it unless a licensed agent is told what they can charge - which will never happen.
Better make sure landlords don't jump on this bandwagon too - I'm dealing with a case at the moment where a landlord has been charged over £3500 in up front fees for a 3 year tenancy charged at 10% of the rent on a let and collect basis - scandalous.
Shelter are being very naive if they think that making the charging of fees illegal will stop unscrupulous agents as all that will happen is that they will charge the landlord more and to compensate the landlord will ask for an increase in rent which will cost the tenant more in the long run!
The only option would be to put a cap on fees but again that is going to vary from area to area as business costs vary so it is going to be hard to do that.
I agree with Simon that it a ridiculous campaign and tenants will lose out in the long run because of it.
I'm afraid to say that with this kind of ridiculous campaign, Shelter will not be getting any more donations from our company!
See how much tenants like dealing with some landlords without an agent there to inject some equality in the relationship...