Nothing wrong with fair fees, says lettings chain boss

Belvoir changed their minds about always sticking to lettings – but not because they converted to the belief that sales and lettings are counter-cyclical.

The firm has never subscribed to the view commonly held that the lettings market tends to thrive when the sales market is down – and vice versa.

However, while Belvoir CEO Dorian Gonsalves acknowledges that the sales market appears to be picking up, he does not think that a growth in sales will hit the lettings sector.

Instead, he thinks, sales prices will rise: “That will mean that there will be more landlords wanting to buy because of capital appreciation, but fewer other buyers because they will not be able to afford it. That will mean more rental demand.”

The second part of Help to Buy is due to launch in January and many commentators believe this will take tenants out of the private rented sector – indeed, the Government is already claiming that 25,000 people have become home owners thanks to its existing schemes.

Gonsalves said: “History shows that when there is an intervention in the housing market, prices increase. So, I do think it will be a case of watch this space.”

Gonsalves is also a staunch defender of fees charged by letting agents to tenants.

He said: “Letting agents exist to provide a service to both landlords and tenants, and therefore it is fair that both contribute to an agent’s costs.

“The fact is that landlords contribute by far the greater amount, and tenants only a relatively small portion. A modest contribution is entirely fair.

“Our own fees at Belvoir are nowhere near the highest in the industry and we are transparent about them. We do say that fees are payable, although like everyone else, we are still awaiting the guidance about showing actual fees on our advertising.

“My belief is that as long as the fees are transparent and appropriate, there is nothing wrong with charging them.”

Belvoir does have some offices in Scotland, where tenants’ fees have been abolished by law. Gonsalves thinks it “inevitable” that rents will have to rise as a result.