Posts with tag: letting agent fees

Rental Market Left in “Limbo” Following Queen’s Speech

Published On: June 22, 2017 at 8:17 am

Tags: government,letting agent fee ban,letting agent fees,Queen's Speech

The rental market has been left in a state of “limbo” after yesterday’s Queen’s Speech, believes the Residential Landlords Association (RLA).

Rental Market Left in “Limbo” Following Queen’s Speech

Responding to the Government’s plans to publish a draft bill on its ban on letting agent fees charged to tenants, the Chairman of the RLA, Alan Ward, says: “A draft bill serves neither tenants nor landlords and leaves the market in a state of unhelpful limbo.”

He continues: “Rather than proceeding with draft plans that will be eclipsed by battles over Brexit, ministers could instead use powers they already have to introduce a fixed menu of fees, which letting agents would have to publish. This would enable tenants to immediately understand fee structures and enable them to more easily shop around.”

The Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, is also disappointed in yesterday’s Queen’s Speech.

He reacts: “So we reach another political juncture punctuated by excessive Autumn Statements, Budget announcements and Queen’s Speeches. The Government yet again are setting out to revitalise their approach to housing, only for us to look back come the next occasion and realise that the previous hype and hot air has evaporated with no tangible action whatsoever.”

Quirk continues: “Where housing is concerned at least, these events have become little less than soothing platitudes for the masses, akin to a Marie Antoinette-type approach. But the cake never comes. Promises to address unfair tenant fees and promote fairness, transparency and prosperity in the housing market while building more homes are worthy intentions indeed, but ones that are all too familiar yet remain unresolved.”

Responding to the Government’s plans to build the second phase of the HS2 high-speed railway line, he says: “The announcement on the HS2 railway is a significant one where the UK property market is concerned. Although it will negatively impact house prices in the path of the route itself, the areas due to benefit as destinations will see positive growth, as it opens up accessibility to more of the country in terms of commuting to major cities from more affordable areas.”

What did you think of the announcements included in the Queen’s Speech?

Thousands of Landlords Ditching Letting Agents to go it Alone

Published On: June 21, 2017 at 9:42 am

Author: Em Morley

Categories: Landlord News

Tags: letting agent fees,letting agents,private rental sector,property management

Thousands of landlords are ditching letting agents to go it alone in finding tenants and managing their properties, as the Government’s reduction in mortgage interest tax relief and stricter mortgage lending criteria are making buy-to-let investment more expensive.

Thousands of Landlords Ditching Letting Agents to go it Alone

A new survey of 2,000 landlords by LetBritain found that 64% of landlords – or around 600,000 nationwide – would consider using private websites to find tenants in order to avoid paying costly letting agent fees.

Some 37% of landlords questioned said that they do not feel that the UK rental market is fit for purpose, with this proportion rising to 50% in London. This is unsurprising, given that almost a quarter – 23% – of respondents claim to have lost hundreds, if not thousands, of pounds through void periods, because instructed letting agents had failed to secure them new tenants.

The Founder and CEO of LetBritain, Fareed Nabir, says: “Today’s research presents a number of concerning insights into the difficulties faced by the Britain’s vital landlord community. It is obvious that landlords up and down the country feel let down by the current property letting system.”

Previously, LetBritain research found that two fifths (40%) of UK tenants – 7.21m people – find the marketplace to be “ruthless and unethical”, with letting agents allowing gazumping and non-existent “phantom properties” to become too commonplace in the sector.

“Clearly, a faster, more affordable and transparent system is required to support the market of 2017 for both landlords and tenants,” adds Nabir.

Landlords must be aware that using a letting agent may become more expensive when the Government’s planned lettings fee ban for tenants is introduced.

If you do decide to ditch your letting agent and go it alone, we urge all landlords to follow this guide to personal safety: https://www.justlandlords.co.uk/news/landlords-guide-personal-safety/

Calls for £30,000 fine for larger agents who flaunt proposed fees ban

Published On: June 6, 2017 at 1:17 pm

Author: Em Morley

Categories: Property News

Tags: ban on agent fees,deposits,letting agent fees,rents,tenants

The more larger letting agents found to be in breach of the proposed ban on letting agent fees should receive fines of up to £30,000 to ensure compliance.

That is the view of the Chartered Institute of Environmental Health, which has revealed what was in its submission under the Government’s consultation process around the ban.

Ban on Fees

The proposed ban on fees was outlined in last year’s Autumn Statement. The CIEH has given its backing to the ban on all letting agent fees, arguing that this would get rid of some barriers facing tenants in moving out of a sub-standard home.

Representing the workforce of environmental health professionals that undertake inspections in the private rental sector, the CIEH has recommended fines of up to £30,000 for big property managing agents.

In addition, the membership body has recommended that holding deposits should not be exempt from any ban, as this could cause issues with loopholes to exploit tenants. An example of this could be agents holding onto more than a single tenant’s deposit for the same property.

It notes that holding deposits pose an extra barrier to tenants wishing to move home, as they heighten the amount of money required to secure a new tenancy. Should these be allowed, the CIEH wants to see them registered under a mandatory client money protection compensation scheme in order to avoid any abuse.

Tenant Rights

Also in its submission, the CIEH suggests that tenants should be given accessible information surrounding their rights and obligations on letting agents. These should include information on how to lodge a complaint with the correct enforcement body.

CIEH believe that the ban on agent fees should apply to landlords and third parties, in order to avoid any additional charges to the tenant through a different route. It suggests that premium sections of the market should not be exempt.

The only reason for exclusions to the ban, the organisation suggests, should be due to malicious tenant actions.

Calls for £30,000 fine for larger agents who flaunt proposed fees ban

Standards

Tamara Sandoul, CIEH policy manager, feels that the underlying point behind the suggestions is to help improve standards and conditions in the sector, while protecting tenants at the same time.

Sandoul said: ‘The private rented sector is such an important part of the housing market, providing homes for people who otherwise cannot afford to buy their own, especially the vulnerable and those on low incomes.’[1]

‘While the vast majority of letting agents are responsible, there are those who exploit tenants by charging them extortionately high fees. A comprehensive ban on letting agents’ fees is a very positive step forward. It will give tenants greater freedom to move out of properties that are hazardous and in poor condition, which in-turn should drive up standards and quality of rented housing,’ she continued.[1]

Concluding, she noted: ‘We do not expect to see higher rents because of the ban as the cost of referencing new tenants is likely to be small in comparison to the costs of maintaining a property to a good standard. At the moment managing agents are charging both the landlord and the tenant fees, but this ban should help to increase competition between letting agents and help to drive the total costs down.’[1]

[1] http://www.propertywire.com/news/uk/call-fines-30000-flout-upcoming-lettings-fee-ban-england/

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

Poll Shows that the General Public Supports the Ban on Tenant Fees

Published On: May 4, 2017 at 8:28 am

Author: Em Morley

Categories: Property News

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

A new poll by Citizens Advice shows that the general public supports the Government’s proposed ban on tenant fees charged by letting agents, while most of those in favour of the fees believe that private renters should only be required to pay a nominal amount to secure a property.

Poll Shows that the General Public Supports the Ban on Tenant Fees

The charity has found that tenant fees currently cost an average of £337 per person, but ARLA Propertymark claims that around £200 per tenant is a more realistic figure for fees relating to a range of administration, including references, credit and immigration checks, as well as the drawing up of tenancy agreements.

Yesterday, ARLA Propertymark called for tenant referencing to be exempt from the lettings fee ban.

However, the survey by Citizens Advice found that 46% of Britons think that tenants should not pay any admin fees or charges, above a tenancy deposit and first month’s rent when using a letting agent. Meanwhile, 61% supported an outright ban on tenant fees when renting property direct from a landlord.

When asked how much is too much when it comes to tenant fees, almost two thirds of respondents (61%) thought that tenants should pay no more than £50 to secure a property. This figure increases to three quarters (74%) when looking at the results for private landlords.

The findings show that many people are happy with the idea that tenants should pay a small fee to cover legitimate expenses during the tenancy application process, but less than 10% of respondents thought that tenants should have to pay more than £150 to secure a property.

Nick Marr, the Co-Founder of TheHouseShop.com, which commissioned the YouGov research, says: “Our latest YouGov survey results clearly show that there is little public support for the current system where tenants can end up paying hundreds of pounds in admin fees to secure a new property.

“In fact, the majority of people said that tenants should pay a minimal fee of no more than £50.”

He believes that there is plenty of evidence to show that a growing number of tenants are actively seeking out private landlords in an attempt to “avoid the hefty fees charged by some letting agents”.

He adds: “Many tenants are prepared to pay a small fee for legitimate expenses involved in securing a property, such as a professional reference check, as this has become common practice even among private landlords – but vague and undefined admin charges that can total hundreds of pounds are tough to defend in the current market.”

Rise in the number of landlords leaving the market

Published On: April 25, 2017 at 11:04 am

Author: Em Morley

Categories: Landlord News

Tags: investors,landlords,letting agent fees,tax

The most recent report from ARLA Propertymark has revealed that there has been an increase in the number of landlords selling their properties and leaving the Private Rental Sector.

An average of four ARLA agents per branch made the decision to sell their buy-to-let property during March, in comparison to three in February. The last time the average number of investors choosing to sell their buy-to-let property was above three per branch was in November 2016-when the ban on letting agent fees was announced.

Reductions

In addition, ARLA Propertymark reported that the number of tenants negotiating rent reductions increase month-on-month in March. During February, 2.2% of agents saw successful rent reductions, in comparison to 3.6% in March.

25% of letting agents said that landlords increased their rents during the last month-unchanged since January. However, this is a fall from the 32% of agents experiencing rent rises in March 2016.

The number of properties being managed per member branch remained constant with the previous month at 183. Last March however, this figure stood at 169, which means that the supply of rental stock has actually increased by 8% in the last twelve months.

Rise in the number of landlords leaving the market

Concerning

David Cox, Chief Executive of ARLA Propertymark, said: ‘It’s concerning that, despite supply increasing over last year, stock failed to return to the market after dipping in February. When we also consider that this is coupled with a rise in the number of landlords selling their BTL properties, this is bad news for those searching for a rental property. The introduction of mortgage interest relief means the market is becoming less and less attractive to investors and it appears some landlords are, as we predicted, choosing to exit the market rather than pay the higher taxes.’[1]

‘What’s more, two thirds (66 per cent) of our members are concerned the Government will introduce even more landlord taxes in 2017, which will only further dampen supply. Following the announcement of the ban on letting agent fees, we expect the situation to only get worse for tenants when inevitably the costs are passed onto tenants through higher rents. However, it’s positive that more tenants are taking action and negotiating rent reductions before the consultation ends and they see their rents increase,’ Cox added.[1]

[1] http://www.propertyreporter.co.uk/landlords/surge-in-landlords-exiting-the-market.html