Posts with tag: letting agents

Welsh Government Moving to Ban Fees Charged to Tenants

Published On: November 9, 2018 at 10:32 am

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Categories: Law News,Tenant Fees Ban

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Welsh landlords could be offered incentives and other support to house those most in need

Landlords and letting agents could be banned from charging fees to private tenants in Wales under plans for a new rule from the Welsh Government.

Currently, tenants can be charged for a range of administrative tasks, including credit, reference and immigration checks, or for an accompanied viewing.

However, the Renting Homes (Fees etc.) (Wales) Bill, which is supported by AMs from all parties, will prohibit all fees connected to granting, renewing or continuing a standard occupation contract, except those explicitly permitted by the Bill.

Standard occupation contracts are due to replace Assured Shorthold Tenancies when the Renting Homes (Wales) Act 2016 comes into force, which is expected in 2019.

Welsh Government Moving to Ban Fees Charged to Tenants

Welsh Government Moving to Ban Fees Charged to Tenants

The Renting Homes (Fees etc.) (Wales) Bill will list permitted payments, such as rent, and include powers to limit the level of security and holding deposits, the latter of which will be capped at one week’s rent.

However, many landlords and letting agents believe that the proposed new law will cause higher rent prices and a potentially negative economic impact on the letting agency sector, including job losses.

Following a Plenary debate on general principles in the Welsh Government, the Chief Executive of ARLA Propertymark (the Association of Residential Letting Agents), David Cox, says: “A ban on fees will have a significant impact on the private rented sector. The Committee has listened on the issue of payments of utilities, but further consideration is needed around charges for change of sharer and surrender of tenancy.

“Furthermore, reference checks must be exempt, as referencing is really important when you’re setting up a tenancy agreement and the risk is that, without any means through which to cover the cost of this process, the most vulnerable tenants will find it very difficult to secure suitable rental accommodation.”

Although the Equality, Local Government and Communities Committee supported the general principles of the Bill, its report does highlight issues of concern and makes a number of recommendations.

Some of the issues highlighted relate to the effectiveness of the enforcement provisions, including the level of financial penalties and the need to ensure that, where prohibited payments are taken, the Bill should make it as straightforward as possible for these to be repaid.

The Committee also saw an important role for Rent Smart Wales in making implementation of the legislation effective.

Cox adds: “The Committee’s report sheds light on a number of unintended consequences, and the Welsh Assembly must now consider minimising the effects of the legislation on agents, landlords and tenants.

“We look forward to working with the Welsh Assembly on the Committee stages.”

Up-to-date information on both the Welsh and English letting agent fee ban can be found on our dedicated page: https://www.landlordnews.co.uk/category/tenant-fees-ban/

Calls for Incentives for Agents to Implement Fees Ban Ahead of Introduction

Published On: November 7, 2018 at 9:15 am

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Categories: Lettings News,Tenant Fees Ban

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Tenancy deposit cap saves average renter more than £100

The Government has suggested that it could incentivise letting agents to stop charging fees to tenants ahead of the introduction of the fees ban, which is expected in spring next year.

On Monday, it rejected calls for extra regulations to enforce the ban, but did say that it would consider proposals that would prevent agents and landlords from possessing multiple holding deposits from different sets of tenants for the same rental property.

Speaking during the committee stage of the reading of the Tenant Fees Bill in the House of Lords, the Government’s housing spokesperson, Lord Bourne, said that advice was being taken on the legality of agents and landlords taking multiple deposits. He believes that this isn’t fair and could be a breach of contract.

Peers called for regulations, rather than guidance, on the use of holding deposits, to make it clear when they could be retained and to define what a default fee is.

Baroness Grender highlighted the case of a Bristol-based letting agent, Be Streets Ahead, which she said had refused to refund a holding deposit to a group of friends who had withdrawn their application, as one of them had a brain tumour.

She insisted that regulations should allow exemptions for health issues, so that a holding deposit could be returned.

She also warned that agents are becoming “more aggressive” on administration fees, and called for incentives for firms to start implementing the fees ban before its official introduction.

Lord Bourne said that the Government is keen to avoid regulations, and rejected suggestions from Lord Best that a delay in implementation, so that clear regulations could be agreed, may be “a price worth paying”.

Instead, peers agreed to be more closely involved in developing guidance.

Lord Bourne also revealed that the Government was engaging with Zoopla, Rightmove and Purplebricks to raise consumer awareness of the fees ban.

Meanwhile, Baroness Hayter took the debate as an opportunity to criticise the Government for increasing the coverage needed for Client Money Protection providers to £200m, with no cap on liabilities.

She noted that this excluded the Royal Institution of Chartered Surveyors and Propertymark, as their limit is £5m.

Landlord Charges Increasing Despite no Firm Date for Tenant Fees Ban

Published On: November 5, 2018 at 10:10 am

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Categories: Landlord News

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A message sent from an unnamed landlord said it was increasing management fees, in order to compensate for predicted upcoming losses.

Letting agents are already increasing their fees to landlords, despite no agreed date being set for the Tenant Fees Bill.

A message sent from an unnamed landlord said it was increasing management fees by 3.5%, in order to compensate for upcoming losses as a result of the tenant fees ban. The note then states that it will increase the fee only by 1.5% as the landlord is a longer-term customer.

Revealed on housepricecrash.co.uk, the message from the agent to the landlord says: “On average, other agents in the area are increasing their fees by up to 5%. We are only looking to increase our overall management fees by 3.5% but I have spoken to [Letting Agent] and as we have been managing your property for a while now, have a good relationship with you and value your custom, we are only going to increase yours by 1.5% so minimal impact.

“What is happening on tenancy renewals is that the rents are being increased to incorporate the increase and make sure you are still earning more money. Your tenant’s contract is ending in December and she has confirmed that she wants another 12 months.”

David Cox, chief executive of ARLA Propertymark, said: “I would suggest it is sensible to prepare the landlords now. These fees aren’t going to go away, they will be merged into something else.

“You can’t take that sort of money out of the industry and expect it to disappear. Tenants will end up paying the fees through their rent.”

No date has yet been given for the start of the Tenant Fees Ban, however it passed its second reading in the House of Lords, and will go to the committee stage in the coming weeks. Find all the information on the proposed changes, as we cover essential updates on the Tenant Fees Ban.

London Letting Agent Records Busiest Quarter in History in Q3

Published On: October 24, 2018 at 9:25 am

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Categories: Lettings News

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Does Section 24 Mean You Should Sell Your Property?

A London letting agent has recorded its busiest quarter in history in the third quarter (Q3) of 2018.

Benham and Reeves saw a significant increase in tenant demand for rental properties in London in Q3, according to its latest lettings report.

New data shows that the letting agent experienced its busiest quarter in history in Q3 2018, with more than 1,000 new tenancies agreed across its 16 London branches over this period. This represents a 22.1% increase in transaction volumes on the same period last year.

The report also reveals that Benham and Reeves had an average of 22 applications registered per available property in Q3, which is up from 16 a year ago. This could form part of the reason for expectations of strong growth in rent prices in the capital moving forward.

But, for now, the letting agent claims that rent prices in London are, for the most part, “flat”, despite the recent hike in tenant demand and lettings transactions.

However, Benham and Reeves adds that it “sees this trend [in rent prices] changing in the next 12 months”, suggesting that values are likely to start going up on the back of high demand for rental accommodation in the capital.

The agent concludes: “From small units to large, from new build apartments to period, basement properties, demand has been high across the board, and at every price point.”

Following a period of declining prices across both the sales and lettings markets in the capital, could London be back on the right track with positive price growth over the end of the year and into 2019?

Earlier this year, Hometrack reported that house price growth was already on the mend in the capital. According to Benham and Reeves’ latest report, it seems that rent price growth may also move into positive territory in the near future.

If you’re a property investor in the capital, this should come as some good news!

Half of Letting Agents Thinking of Quitting Industry Due to Fees Ban

Published On: October 19, 2018 at 9:04 am

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Categories: Lettings News

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Half of Letting Agents Thinking of Quitting Industry Due to Fees Ban

Half of letting agents across the country are thinking of quitting the industry, due to the impending tenant fees ban, which could entirely wipe out some of their profits, turning their businesses into loss-makers.

In a survey conducted by property maintenance software company Fixflo, half of agents claimed that they would lose between 10-30% of their revenue when the tenant fees ban is introduced, which is expected in spring 2019.

The report states: “This is a major threat for any business, especially small businesses, who will often yield a net profit of 10-20%.”

A total of 50% of agents asked about the impact of the ban said that they would lose between 10-30% of their revenue, while almost 10% believed that they would lose 30% or more of their income due to the ban.

41% of agents cited loss of revenue as the biggest challenge to face them over the next year, with a further 32% saying that their biggest challenge would be winning new landlords.

Just 9% of agents highlighted online competition as a major concern.

Most worryingly, almost half (48%) said that they are wondering whether to continue operating in the lettings industry, due to Government changes.

Letting agents under increasing strain

The Fixflo report says that changes, such as the tenant fees ban, are putting the traditional letting agent business model under increasing strain.

It continues: “It is evident that the Government’s measures are not being welcomed by the industry.

“We expect to see further industry consolidation over the next 12 months, as the increased costs of compliance need to be spread over larger portfolios to keep compliance costs per property at economical levels.”

The survey is based on responses from 401 agents around the country.

In addition, 100 landlords responded to a separate survey from Fixflo.

Of these, 72% said that things have become more difficult for landlords over the past year. Despite this, 70% of those polled said that they plan to keep their property portfolios or to expand.

Of the total, 37% of landlords do not use a letting agent. Of those that do, rent collection was cited as the most important service provided by an agent, followed by legislative compliance handling, with repairs and maintenance in third place.

For landlords that do not use a letting agent, we have a handy page on our website that is designed to keep you up to date with your responsibilities. Take a look at our helpful guides here: https://landlordnews.co.uk/guides/

Government to Make Improvements to Property Agent Sector

Published On: October 16, 2018 at 9:34 am

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Categories: Property News

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Letting Agents could Benefit from Build to Rent

The Government has announced plans to make improvements to the property agent sector.

Heather Wheeler MP, the Minister for Housing and Homelessness, unveiled a new working group made up of experts from across the property industry. It will consider options to raise standards in the property agent sector, including the case for regulation and mandatory qualifications for all property agents, so that landlords, tenants, homebuyers and vendors can be confident that they are receiving a professional service and are being charged fairly.

The working group, chaired by Lord Best, will report its recommendations to Government by summer next year.

The group will consider the entire property agent sector to ensure that any new framework, including professional qualification requirements, a code of practice and a proposed independent regulator, is consistent across letting, management and estate agents.

Wheeler says: “For too long, many people have faced incurring fees and bad service from a number of property agents. People should have confidence when buying, selling or renting a home.

“Lord Best’s wealth of knowledge will provide a valuable insight and help us make necessary changes, to ensure consumers have confidence when buying, selling, letting or renting their home.”

She adds: “Lord Best will be joined by representatives of agents and consumers, as well as independent experts, with the group instructed to report back to Government in summer 2019.”

A recent report from Which? found that 85% of landlords who use an agent are satisfied with their service, while 67% of tenants are pleased with the way that their agent repairs and maintains their homes.

However, Lord Best points out that there have been calls for tighter, fairer regulations of the property agent sector from those representing landlords, tenants and even agents themselves.

He comments: “I am delighted to work with Government, industry and consumers to advise on how we can accomplish this in practice, and I look forward to our working group achieving real progress together.”

Members of the group, which has been designed to ensure that the entire sector is represented, and the needs of both businesses and consumers are considered, include: the Royal Institution of Chartered Surveyors; the National Landlords Association; Citizens Advice; ARLA Propertymark (the Association of Residential Letting Agents); and NAEA Propertymark (the National Association of Estate Agents).

The announcement follows similar Government plans to crack down on the leasehold sector.