The news this morning that the chancellor may announce an outright ban on letting agents fees is very worrying to our sector.
Our fees cover services. For tenants we provide comprehensive referencing, a full inventory to safeguard deposits, a legally binding tenancy agreement, registering of the deposit with a government approved scheme and ensure the property is ready to be moved in to. Stripping it back - as a consumer, you expect to pay for goods and services, and this is what is being provided.
Our landlords pay a monthly management fee for us to oversee the tenancy, and for us to coordinate maintenance and issues that may arise and keep their property safe and we have a duty of care to ensure tenants are happy. We perform this in a professional manner, with up to date industry knowledge. A huge amount of what we deal with day to day is legalities within property law, and we are required to be up to date in our knowledge of property legislation at all times. People wouldn’t question paying a solicitor or lawyer large fees, yet what we do is of a similar nature to keep tenants safe from rogue landlords, something we take very seriously.
We are a member of ARLA (Association of residential letting agents) and they have made a strong case to the government that this will not help tenants in the long run. ARLA’s research shows that actually, the average fee charged by licensed agents in £202 per tenant – which is fair, reasonable and far from exploitative. The costs that are incurred for a letting agency to run if fees are abolished, will then have to be shifted for landlords to foot. The knock on effect of this, is rents will have to rise. This puts renters on the back foot, which is the very thing the government are trying to avoid. There is a need for more housing, and the current buy to let market will diminish with people withdrawing from investing in property and choosing other goods to get a better return on investment.
It is very difficult, when we do sadly work amongst agents who exploit the system and expose tenants. What we would like to see is regulation. If all agents were required to be licensed under governing bodies there would not be the agents who were charging extortionate fees. There would be blanket costs for all tenants, whoever they rented from. They would know the fees previously, and could save accordingly. The decision for agents to have to publish their fees, we believe is positive. Hidden or surprise costs are not something we condone, and we work on a transparent basis that people are aware what they are signing up to and what their costs cover.
In our opinion, the fees tenants pay for cover documents that benefit them. Landlords have to adhere to many important regulations regarding EPCs on the property, gas safety certificates, insurance, and deposit registration. Tenants need to appreciate that full referencing, inventories, tenancy agreements make renting safe for them. Any reputable agent will be transparent and clear with these costs, and the charges ensure that as an agent we are placing reliable and acceptable tenants in a landlords property.
If you would like further information, please don’t hesitate to contact us.