Posts with tag: fees

Will ban on agents’ fees be scrapped due to the election?

Published On: April 25, 2017 at 9:05 am

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The Residential Landlords Association has moved to suggest that the upcoming General Election on June 8th could see the proposed ban on letting agents’ fees being shelved.

It is predicted that the Government could be left with new priorities on the back of the election result, which could see the ban abandoned.

Consultation

Just last week, the Department of Communities and Local Government abandoned the workshops with letting agents-which were previously at the heart of the formal consultation process.

Despite the consultation itself continuing, the abandonment of the workshop has prompted questions in the industry.

Policy Director of the Residential Landlords Association, David Smith, wrote on the organisation’s website: ‘There is now a possibility that the entire policy will be lost if a new Housing Minister has other things which capture his attention more strongly.’[1]

Will ban on agents' fees be scrapped due to the election?

Will ban on agents’ fees be scrapped due to the election?

Delayed

Mr Smith’s warning comes alongside a warning highlighting other issues which could be delayed or scrapped depending on the election result.

One of these is the Homelessness Reduction Bill, which has been passed by Parliament but has yet not received Royal Assent required to become law. What’s more, there are regulations that need to be put in place to set up a database of rogue landlords and banning orders.

Smith said: ‘Regulations were expected shortly to start the process of making this happen and the IT project that underpins the database was also in progress. Again these are now trapped without a Minister to push them forward for the next month…The October deadline must now be in doubt.’[1]

In addition, the Housing and Planning Act included provisions about Client Money Protection becoming mandatory for letting agents.

Concluding, Smith noted: ‘There were no further consultations expected in these areas but there were working group reports which needed approving and regulations were again to be drafted to implement the reforms. Yet again this will be at risk of delay.[1]

 

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/4/fees-ban-whole-policy-may-be-lost-thanks-to-election-warns-trade-body

 

4,000 agents could lose jobs following ban on fees

Published On: March 28, 2017 at 10:08 am

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New research released by ARLA Propertymark suggests that there are 4,000 jobs at risk, should the proposed ban on agent fees come into force.

In a report presented to the organisation’s annual conference, ARLA said that the ban could cost tenants thousands of pounds.

Funds

The research reveals letting agent fees make up around one fifth of letting agent revenues and provide vital funding for imperative checks required to set up tenancy agreements.

Should fees be banned outright when the Government publishes its consultation, agents will be left with little choice but to pass the cost onto landlords in the form of higher agent fees.

ARLA’s research suggests that 41% of landlords expect that they will have to pass on some of this inflated cost to their tenants. On average, these rises will amount to £103 per year.

If landlords were to pass on the entire uplift in letting agent fees, tenants would be hit more, with typical rises of £275 per year.

In addition, there would be a huge impact on the lettings sector overall, which employs roughly 58,000 across the country.

4,000 agents could lose jobs following ban on fees

4,000 agents could lose jobs following ban on fees

Risks

The report states: ‘If letting agents take the full hit of the letting agent fee ban, 16,000 jobs will be at risk. It’s more likely however agents will pass on 75 per cent of the costs to landlords, which would result in job losses of around 4,000.’[1]

More side effects from the proposed ban include 27% of landlords choosing not to purchase any more rental properties. 20% meanwhile said that they would sell some of their portfolio.

ARLA’s report shows that in Scotland, letting agent fees were banned in 1984 and clarified in the Private Rented Housing Act of 2011.

The report goes on to say: ‘This meant that tenants were only accountable for the rent and deposit, and everything else would be charged to the landlord. However, this has resulted in many agents carrying out less of the tasks they were doing previously. Worryingly, one in four said they no longer do credit checks as standard.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/3/4-000-letting-agency-jobs-at-risk-if-fees-ban-happens-warns-arla

 

Ban on agent fees will impact negatively on 20% of landlords

Published On: January 23, 2017 at 11:55 am

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Categories: Landlord News

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The Housing Minister Gavin Barwell has moved to state the proposed ban on letting agents levying fees on tenants will only negatively impact 20% of tenants.

An ARLA report from the meeting of the All Party Parliamentary Group for the Private Rented Sector earlier this month says that Barwell disputed the notion that the ban would be universally costly for landlords and tenants alike.

Financially Impacted

Mr Barwell told MP’s that while the implications of scrapping fees does need to be assessed, early HMRC forecasts suggest that just a fifth of investors will be hurt financially.

In addition, the report states: ‘Barwell also said that since the change will be phased in it will not have as large an effect. In response to concerns that landlords will have to up their rent to cover the costs of the fees, Barwell said that it is of course up to the discretion of the landlord to decide their fees. He said the government see the measure part of as creating a fair tax regime. He said the forthcoming consultation will not look at the value of the measure but will look at how it is implemented.’[1]

What’s more, Mr Barwell is reported to have stated that Build To Rent would feature in the Government’s White Paper on Housing. Barwell sees Build To Rent as good value for money and believes that the scheme offers longer tenancies-one of his key objectives.

Ban on agent fees will impact negatively on 20% of landlords

Ban on agent fees will impact negatively on 20% of landlords

Changes

After the meeting, managing director of ARLA David Cox, observed it was clear that the Government is trying to implement large scale changes to the private rental sector in England.

Cox noted: ‘Since the 1980s, England has been building up to 40 per cent fewer homes than the 240,000 needed annually. The resulting shortage of about two million homes has left the country with soaring prices and a growing gulf between the property haves and have-nots.’[1]

‘Unfortunately, the government doesn’t seem to realise that punishing hard-working letting agents who deliver a hugely valuable service will not in the long run improve the affordability of the sector and the service that tenants receive.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/1/letting-fees-ban-will-only-hit-20-negatively-claims-minister

 

What regions have the highest and lowest letting agent fees?

Published On: November 25, 2016 at 12:31 pm

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New research from online letting agency Urban.co.uk has claimed to reveal the highest and lowest letting agent fees charged to tenants across the UK.

The investigation comes after the controversial announcement by the Chancellor in the Autumn Statement that letting agent fees are to be banned.

Fees highs and lows

Urban said it accessed 400 agencies in total-including some online-in more than 150 towns and cities in the UK.

Data from the report indicates that on average, the five most expensive areas for tenant fees are in:

Basingstoke-£621.67

Slough-£543.33

Cirencester-£535.00

Reading-£530.62

Alnwick-£530.31

On the other end of the scale, the five cheapest areas for letting agent fees were found to be in:

Harbrough-£136.67

Worksop-£139.00

Market Harborough-£153.00

Lees-£162.98

Newham-£164.00

Costs include the preparation of a tenancy agreement, contract fees, referencing, Right to Rent checks and guarantor fees.

What regions have the highest and lowest letting agent fees?

What regions have the highest and lowest letting agent fees?

Oddities

As part of its research, Urban looked at what some agencies charged tenants for and found some shocking results. These include:

  • £200 to change the name on an agreement
  • £40 to live with your partner, if not married
  • £7.50 to access keys
  • £90 to move in on a Saturday
  • £25 for extra copies of the tenancy agreement

Adam Male of Urban, noted: ‘The additional costs that some tenants are required to pay can often be easily explained however, and this is something that letting agents often struggle to get across.’[1]

 

‘For instance, speedy moving and name changes on tenancy agreements can be due to additional solicitors fees, so we recommend tenants ask up-front what fees they might be subject to and compare them with others in the local area to ensure they get the best deal,’ he added.[1]

[1] http://www.mirror.co.uk/money/750-pick-up-key-40-8186288