Posts with tag: letting agent fees

Over £300,000 Worth of Tenancy Deposits Stolen in Q1 2017

Published On: April 18, 2017 at 9:19 am

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The recent conviction of a letting agent who stole £15,000 worth of tenancy deposits has taken the total value of deposits that are known to be stolen in the first quarter (Q1) of 2017 to £310,000.

Over £300,000 Worth of Tenancy Deposits Stolen in Q1 2017

Over £300,000 Worth of Tenancy Deposits Stolen in Q1 2017

The Founder and CEO of Keep It Simple Group (KIS), Ajay Jagota, has taken this opportunity to campaign against deposits in the private rental sector.

Thirunga Damayantharan, a Croydon-based letting agent, was sentenced to 19 months in prison last month, after being found guilty of stealing a number of tenancy deposits over a six-year period.

Jagota has long been campaigning for an official Government response to a series of crimes and misdemeanours in the tenancy deposit industry, so it is no surprise that he has welcomed the news that the Government’s consultation into the letting agent fee ban will also consider reforming the way tenancy deposits are paid.

Jagota believes that a more effective way to improve the private rental sector would be for monetary deposits to be scrapped.

His firm KIS was the first letting agent to abolish monetary tenancy deposits, replacing them with a one-of-a-kind insurance policy.

Jagota explains his stance: “The Government’s announcement that deposit reform will form part of the letting agent fees ban consultation led to the usual flurry of outrage from the usual suspects, but the industry needs to accept that change is coming.

“It’s absolutely true that deposits are a financial burden on renters in need of minimising, and it’s in the letting industry’s interest as much as anybody else’s that they are not only minimized, but eliminated altogether. We exist to help landlords find and keep good tenants!”

He continues: “No one is saying that asset protection for landlords isn’t essential – we only look to research this week claiming that a third of tenants wouldn’t own up to damaging their rented property – but there are better ways of doing it, and replacing cash deposits with insurance policies is one.

“I can already see a path to a place where it costs agents money whenever they take a cash deposit. The chair of one of the tenancy deposit schemes seemed to be hinting in a recent interview that as ongoing low interest rates are making it harder to operate, he wants to start charging for his services. You might think that will never happen, but a lot of people thought that a letting agent fee ban would never happen.”

Jagota insists: “Whether by legislation or technology, the sector is going to change. It is time to recognise the sector’s associations who represent it have a poor track record of lobbying Government, and it is now time to embrace any opportunities from the forthcoming changes.”

Government Aware that Letting Agent Fee Ban will Increase Rents

Published On: April 10, 2017 at 9:23 am

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Government Aware that Letting Agent Fee Ban will Increase Rents

Government Aware that Letting Agent Fee Ban will Increase Rents

As the Government releases its consultation paper on banning letting agent fees charged to tenants, the document confirms that ministers are aware the ban will increase rents.

On Friday, the Government launched the consultation, with a request for feedback. The ban will prohibit letting agents from charging fees to tenants.

The document also confirmed that landlords would be banned from charging tenants any form of letting fee, to ensure that they do not pass on the costs.

As it is believed that the fees will instead be charged to landlords, many fear that they will be forced to increase rents to accommodate the higher costs.

The Managing Director of StudentTenant.com, Danielle Cullen, is frustrated that the consultation acknowledges that rents will be pushed up.

She reacts to the announcement: “So here we have it, the release of the consultation for the ban on letting fees, and it’s brutal for agents.

“Oh how foolish the Government is to think it is going to help tenants to save money. The contradiction in the paper is incredible; after pages relating to the fairness of fees, later there is a part called Increase in Rents! It is clearly acknowledged that landlords will be increasing their rent to account for the additional costs they will have to pay. But this is okay because tenants are able to pick the rental bracket that suits them better? Surely tenants will end up in sub-standard properties, or homeless because they can’t afford the increased rent, in a market that is already going crazy.”

She continues: “Tenants will end up paying more over the course of the year as rental prices hike and landlords can comfortably increase their rents – probably higher than the cost of the additional fees they will have to pay. All this does is increase the monthly cost for tenants, and this is going to hit students hard. Students struggle as it is to pay their rent and keep up with their bills whilst studying, and now they will be faced with increased costs every month, instead of being able to pay one lump sum and get it out of the way. I completely agree that something needed to be done about agent fees that were spiralling out of control – I was shocked to uncover the extortionate fees charged by some after some research following the announcement last year. However, the Tories just seem to be going about it in completely the wrong way.”

Do you think you will have to increase rents to accommodate the higher costs? Or will you stop using your letting agent altogether?

Void periods could rise if ban on fees goes ahead

Published On: March 28, 2017 at 8:55 am

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Alterations to letting agent fees could well lead to higher rents and greater repossessions, as a result of lesser quality of tenant referencing in the private rental sector.

Insurance provider Endsleigh has raised the concerns, also highlighting fears that if letting agents are banned from charging fees to tenants, the quality of referencing could fall. This is due to agents potentially sourcing cheaper referencing alternatives to offset any future losses of income.

Fees

Presently, tenants can be charged fees for a number of administration tasks, including reference, credit and immigration checks. This however looks likely to change as the ban on agent fees comes into force soon.

It is now four months since the ban on fees was proposed by Chancellor Phillip Hammond in the Autumn Statement. Endsleigh fears that this proposal has created confusion in the private rental sector.

David Hadden, head of Endsleigh Let, noted: ‘The private rental sector is currently in limbo waiting for further details on the fee ban but the topic appears to have fallen off the agenda, causing confusion for both letting agents and tenants.’[1]

‘As a partner to the sector, we’re keen for this discussion to move forward so that the letting industry can properly assess and address the likely impacts of these changes,’ he continued.[1]

Void periods could rise if ban on fees goes ahead

Void periods could rise if ban on fees goes ahead

Impacts

Both referencing and insurance are two areas likely to be impacted upon by the changes, according to Hadden. However, he acknowledges that the scale of this is unclear as the Government decides how best to press ahead with the ban.

Continuing, Mr Hadden said: ‘Our letting customers have told us how concerned they are about these changes and what it means for the private rental sector.’[1]

‘Poor quality referencing could lead to higher eviction numbers and longer void periods. This, in turn, could affect connected insurances such as rent guarantee, with the likelihood of claims to be perceived as increasing, premiums would surely follow suit,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/tenant-fees-ban-could-leave-landlords-facing-lengthy-void-periods

 

Letting Agent Fee Campaign Enters Second Stage

Published On: March 28, 2017 at 8:47 am

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Letting Agent Fee Campaign Enters Second Stage

Letting Agent Fee Campaign Enters Second Stage

Around 180 letting agents in parts of Berkshire and Hampshire are being targeted as part of a letting agent fee campaign to find out if agents are displaying their fees correctly.

It is the second stage of the letting agent fee campaign being jointly conducted by The Property Ombudsman (TPO) and the Chartered Trading Standards Institute. As of yesterday, 179 letting agents in and around Basingstoke and Reading are being targeted.

They are being asked to provide photographic evidence of their compliance with the law, which requires fees to be displayed in the branch and on the company’s website.

The second stage follows on from the end of the first phase, where 99% of 266 TPO letting agents in Swansea and Dorset were found to be compliant.

All had been asked for similar photographic evidence.

Agents found to be displaying the required information incorrectly were given the chance to amend it and re-submit their evidence.

The campaign found that just two agents failed to comply, either by not responding or not addressing inaccuracies that had been flagged up.

Both will now be referred to TPO’s disciplinary and standards committee for further investigation.

This committee is independent, and has the power to fine, suspend or expel an agent from TPO, plus refer it to Trading Standards officers, who can impose fines of up to £4,000.

Letting agents are required to display fees, along with their redress scheme membership details and Client Money Protection (CMP) scheme.

The Property Ombudsman, Katrine Sporle, says: “TPO has seen an increase in the number of enquiries about fees from tenants in recent weeks. It is essential that agents provide clarity and transparency about what fees are being charged for what service, so that all parties understand the commitments they are entering into.”

The campaign will continue while details of a consultation on the letting agent fee ban have yet to be announced.

Letting agents, make sure you comply with the law!

Housing Minister confirms ban on agent fees

Published On: March 23, 2017 at 10:33 am

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The Housing Minister Gavin Barwell has confirmed that the consultation on the proposed ban on letting agent fees levied on tenants in England will launch, ‘in the Spring.’

In a letter to Labour MP Julie Elliott, Barwell said that the Government: ‘Is committed to building a strong and safe private rented sector, which provides security and stability for both tenants and landlords.’[1]

Competition

Continuing, Mr Barwell said that the Government: ‘Announced at the 2016 Autumn Statement a ban on letting agent fees paid by tenants, to improve competition in the private rental market and give renters greater clarity and control over what they will pay. The Government will consult in the Spring on the detail of implementation.’[1]

In addition, Mr Barwell went on to say that the long-awaited Housing White Paper, announced at the end of February, presents the Government’s intention to promote fairness and transparency for leaseholders.

Housing Minister confirms ban on agent fees

Housing Minister confirms ban on agent fees

‘We will consult on a range of measures to tackle all unfair and unreasonable abuses of leasehold and consider further reforms through the consultation to improve consumer choice and fairness for leaseholders,’ Barwell added.[1]

Concluding, he stated: ‘An increasing number of private tenants are happy with their tenure and standards are improving. We are determined to ensure all sectors of the housing market provide decent homes.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/3/minister-confirms-fee-ban-on-its-way-but-rental-sector-improving

One Third of Letting Agents in Milton Keynes Fined for Not Displaying Fees

Published On: February 20, 2017 at 10:49 am

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Around one third of all letting agents in Milton Keynes have been fined by the council’s Trading Standards department for not displaying fees, as required by the law.

The 30 agents were fined thousands of pounds for failing to display the fees they charge to landlords and tenants.

All of the letting agents in the town were initially contacted and reminded of the law on displaying fees, but, worryingly, many did not know they are legally obliged to do so.

One Third of Letting Agents in Milton Keynes Fined for Not Displaying Fees

One Third of Letting Agents in Milton Keynes Fined for Not Displaying Fees

Rightmove currently lists 108 sales and letting agents in Milton Keynes, which is broadly in line with the 105 contacted by Trading Standards.

The department acted after new legislation in 2015, under the Consumer Rights Act, requires letting agents to display the fees they charge both in their offices and online.

Throughout the past year, Trading Standards officers carried out research to check if agents in the borough were displaying the required information. They found that many of the agents were not aware of the legislation and what it means for them.

Trading Standards then wrote to all of them, with an explanation of their responsibilities and a warning of financial penalties if they failed to comply.

Two months later, officers followed up the letters with visits to the letting agent offices.

While most – 75 – had displayed their fees correctly, 30 agents were still breaching the law on displaying fees.

Councillor Mick Legg, the Cabinet Member responsible for Trading Standards, comments: “In these days of very high mortgage costs, many people are renting, and many of them really are in the hands of letting agents.

“It is important that information about fees is absolutely transparent from the start, and our Trading Standards team tried to work with local agents when the Consumer Rights Act came into force to ensure that they were aware of their responsibilities, to enable would-be tenants to receive the information they are entitled to when choosing which agent to use.”

He expresses: “It’s disappointing that, despite warnings from our Trading Standards team, some letting agents still failed to comply with the new Consumer Rights legislation. However, we hope these fines will send a strong message to letting agents across the borough to get their house in order.”

All 30 letting agents received fines from Trading Standards for their continued failure to comply with the law on displaying fees, two of which appealed to the First-tier Tribunal, but were dismissed earlier this month by the hearing judge.

The judge also ordered them to immediately start displaying fees and display which redress scheme they belong to and whether they offer Client Money Protection, which is also required under the same law.

Letting agents, remember that you must comply with the law on displaying fees or face hefty fines.