Posts with tag: fees

Agents warned to streamline their processes ahead of fee ban

Published On: September 13, 2017 at 9:19 am

Tags: fees,letting agent fee ban,letting agent fees,tenants

A new warning from automated rental payment provider PayProp states that letting agents must be fully prepared for the upcoming ban on upfront fees charged to tenants.

The firm suggests that the way to do this is by streamlining their processes.

Ban on Fees

A ban on letting agent fees charged on tenants is widely expected to be implemented throughout England at some point in 2018. A debate on the ban took place in Westminster just last week.

In Wales, there is a similar consultation ongoing. Fees have been banned in Scotland since 2012.

It is feared that the majority of letting agents will lose a significant proportion of revenue when any such ban is introduced. As part of its consultation, the Welsh Government reports that fees charged to tenants make up around 19% of an agent’s income.

A separate study undertaken by software provider Eurolink calculated that the ban could cost a single office agency £85,000. For a multi-branch network, this could rise to £850,000.

Agents warned to streamline their processes ahead of fee ban

Neil Cobbold, Chief Operating Officer of PayProp in the UK, noted: ‘It’s clear that we could soon reach a point when upfront letting agent fees charged to tenants are banned in all corners of the UK.’

‘That’s why it’s important that agents begin to plan now for how they are going to replace lost revenue – whether through alternative revenue streams, optimisation of business processes for better efficiencies, or through low-overhead growth.’[1]

Concluding, Mr Cobbold said: ‘The ban on letting agent fees is all about a changing market and effective adaptation. The agents who plan their strategy now are likely to be most successful when a ban is finally introduced.’[1]

[1] http://www.propertyreporter.co.uk/landlords/agents-must-streamline-their-processes-in-wake-of-fee-ban.html

31% of landlords unaware of proposed letting agent fees ban

Published On: September 7, 2017 at 8:59 am

Author: Em Morley

Categories: Landlord News,Tenant Fees Ban

Tags: buy-to-let landlords,fees,government,letting agent fees

A new survey has revealed that nearly one-third of buy-to-let landlords are unaware of proposals to ban letting agent fees.

The research from property management platform No Agent, coinciding with yesterday’s discussion on the letting agent fee ban in Westminster, discovered 31% of landlords are oblivious to the potential ban.

Ban on agent fees

In last year’s Autumn Statement, the Chancellor announced the proposals, leaving many to air concerns that these fees will be shifted to landlords. Inevitably, these costs will need to be recouped elsewhere, more than likely through higher rents.

Many experts suggest that banning letting agent fees will end up impacting on tenants – the very people the Government is trying to help. However, landlords are also unlikely to escape unscathed.

Additional findings from the survey show that 35% of landlords agree with the Government’s arguments that the ban will force agents to become more competitive and to provide a better service.

46% feel that a deposit cap of one month’s rent – which was yesterday agreed would be exempt from any ban- would make landlords less likely to rent properties to tenants with a poor credit history.

In addition, 37% of landlords agreed that if the deposit was to be capped at one month’s rent, they would be less inclined to rent to tenants with pets or children. 57% of landlords believe a cap on letting fees for tenants will work better than an outright ban.

31% of landlords unaware of proposed letting agent fees ban

Worrying

Calum Brannan, CEO of No Agent, noted: ‘It is time to bring the rental sector into the current day and remove the inefficiencies it has been plagued with for so many years, and this bill marks the beginning of this change.’

‘It’s worrying to see the awareness of the proposed tenant fee ban amongst landlords is so low, particularly given how much of an impact this will have on their current business models. More needs to be done by the Government to ensure this vital group know what is to come into effect in 2018,’ he continued.

Concluding, Mr Brannan said: ‘We do believe the ban will force further transparency in the lettings market, which is ripe for disruption and requires a complete overhaul. We very much hope, along with the 37% of landlords of this country, that this ban will force letting agents to become more efficient, and adopt technologies and new processes that will save money for all parties involved, including tenants.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/9/survey-finds-31-of-landlords-unaware-of-proposed-letting-fee-ban

Flat fee mortgages for buy-to-let at record lows

Published On: July 18, 2017 at 1:40 pm

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,Buy-to-Let,fees,landlords

The most recent data released from Mortgages for Business shows that flat fees for buy-to-let mortgages have dropped to a new low.

These fees fell by over 5% in the second quarter of 2017, from £1,446 to £1,370.

Fees

However, percentage based fees are now becoming more common with lenders. This is a good way of keeping interest rates low, while still letting profits to scale with larger loans.

Percentage-based fees now apply to 48% of the total number of buy-to-let mortgage products, having now overtaken flat fees in terms of product availability since the start of 2017.

In fact, these products have risen in number in every quarter since Q2 2016.

With percentage-based fees becoming more common, the market has seen a reduction in the availability of fee-free options. Now, just 11% of buy-to-let mortgage products have no arranged fees – a fall from 15% in the opening quarter of the year.

Flat fee mortgages for buy-to-let at record lows

Exceptional Lows

Steve Olejnik, COO of Mortgages for Business, observed: ‘With interest rates still at exceptional lows, it’s all the more important to make sure you look at any additional charges when taking a buy-to-let mortgage. It is therefore promising to see a reduction in the average flat fee charged for mortgage products.’[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-flat-fees-at-new-record-low.html

Could property investment soon become financially unviable?

Published On: June 27, 2017 at 8:40 am

Author: Em Morley

Categories: Finance News

Tags: buy to let market,buy-to-let landlords,fees,landlords,letting agents,Tenant Fees Bill

A leading industry peer has moved to voice his concerns surrounding the future of the buy-to-let market, following recent announcements and legislation changes.

Last week’s Queen’s Speech were dominated by a number of Brexit bills, but also included the Tenant’s Fees Bill, which proposes banning landlords and letting agents from charging fees to tenants.

Difficulties

This proposal was initially announced last November as part of the Autumn Statement. Despite the details remaining unclear, the move is designed to put the cost of all letting agent fees onto landlords. In turn, an industry peer has expressed concern that this will make it extremely difficult for a number of buy-to-let landlords to make any considerable money moving forwards.

Simon Gerrard, managing director of Martyn Gerrard, called the ban announcement a, ‘headline grabbing knee-jerk reaction,’ from the new Government.

Gerrard observed: ‘This decision has been made with little consideration for the housing industry and my concern is that, moving forward, investing in property will cease to be a financially viable option for the many.’[1]

Could property investment soon become financially unviable?

Rent Rises

Many experts believe the proposed changes in legislation could leave landlords with little choice but to increase rents, as agents pass existing tenants fees onto investors.

ARLA has also moved to suggest that up to 4,000 jobs in the letting sector could be at risk as a result of the alterations.

David Cox, Chief Executive of ARLA, noted: ‘A ban on letting agent fees will cost the sector jobs, make buy-to-let investment even less attractive, and ultimately result in the costs being passed on to tenants.’[1]

‘It’s unlikely the government had enough time to analyse all of the responses from the consultation, as it only closed on the 2nd June. It appears they had already made their decision and therefore the consultation was no more than a ‘tick box’ exercise and they haven’t appropriately taken the industry’s views into account,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/investing-in-property-could-soon-cease-to-be-financially-viable

Citizen’s Advice welcomes ban on agent fees

Published On: June 23, 2017 at 11:39 am

Author: Em Morley

Categories: Property News

Tags: ban on letting agent fees,Buy-to-Let,fees,landlords

Consumer group Citizens Advice has moved to give its backing to confirmation in the Queen’s Speech of the upcoming ban on letting agents’ fees levied on tenants in England.

Ban on Fees

Gillian Guy, chief executive of the organisation, noted: ‘Citizens Advice has long called for a ban on letting agent fees with people paying an average of £400 to letting agents for standard administration, such as carrying out references and credit checks. It’s important that this ban covers all fees.’[1]

‘Seventy four per cent of private renters with children have experienced problems with the quality of their home, including broken heating and no hot water. So we’d also like the government to look at improving the quality of housing in the private rented sector, by introducing maximum timescales for landlords and letting agents to carry out repairs,’ she continued.[1]

Citizen’s Advice welcomes ban on agent fees

Poll

Earlier this year, Citizens Advice commissioned a survey of 2,000 tenants which was in association with You Gov. Results found that of those households earning £50,000 or more, 69% paid money to their agents, with 9% paying in excess of £1,000.

19% paid between £500 and £999, with 20% paying between £250 and £499.

In addition, 51% of private sector tenants with a household income of £50,000 or more said that they had experienced issues with damp or mould in their property.

One fifth also said that they had a rodent or other animal infestation.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/6/consumer-group-welcomes-confirmed-ban-on-letting-agents-fees

Ban on agent fees looks unavoidable

Published On: May 19, 2017 at 9:50 am

Author: Em Morley

Categories: Finance News

Tags: ban on fees,fees,landlords,letting agent fees,tenants

A leading property campaigner has warned the property sector to brace themselves for the proposed ban on letting agent fees to come into force.

Ajay Jagota wants the sector to, ‘stop living in complete and utter denial’ about the forthcoming proposals,’ noting that the ban has been promised by all three major political parties in their election manifestos.

Ban on Fees

The three main parties talk about the ban as follows:

Conservatives: The Tories confirm that they will press ahead with plans for the letting agent fee ban and promise commitment to, ‘improve protections for those who rent, including by looking at how we increase security for good tenants and encouraging landlords to offer longer tenancies as standard.’

Labour: The opposition party want to see a Department of Housing, which will oversee the standards and affordability of homes in the sector. It also calls for three-year tenancies to become the norm and for rent rises to be capped with inflation.

Lib Dems: Called for mandatory licensing of landlords, three-year tenancies and a cap on upfront tenancy deposits.Mr Jagota, founder of sales and lettings firm KIS, observed: ‘The Letting Agent fee ban is the latest in a long line of things the industry believed would never happen until they did. If it wasn’t obvious enough, the manifestos we’ve seen this week make it clear those people need to stop living in complete and utter denial.’[1]

‘It is not a case of whether Letting Agent fees are going to be banned but how the ban will be implemented. It’s not even a case of when the ban comes as legislating for it is likely to be low hanging fruit compared to other pledges on housing so I’d expect to see it in the first Queen’s Speech of whatever government we have after June 8,’ he continued.[1]

Ban on agent fees looks unavoidable

Details

Moving on, Jagota noted: ‘All three manifestos are, however, very light on detail when it comes to the form the ban will take. Do they mean an outright ban of any kind of fee being charged to tenants or will things like referencing fees be exempt? It’s over these issues that the industry now needs to mobilise.’[1]

‘The most significant pledge on renting of any of the parties is the Liberal Democrats deposit cap. It’s not a policy I agree with, but its very existence means that deposit reform is now unavoidably on the agenda.’

‘I can already hear some people saying ‘it’ll never happen’, to which I say this: Two years ago Labour plans to ban letting agent fees were roundly mocked by the Conservatives. Today it’s unthinkable that the Conservatives will go back on banning them. Like it or not, deposit reform has arrived,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/tenancy-deposit-reform-unavoidably-on-the-agenda.html