Letting agents respond to ban on fees
Date published: 09 November 2017
Local letting agents have responded to the Government's proposals to ban charging letting fees to tenants.
Amanda Chadwick, of LMS Property Management in Rochdale, commented: “As a proprietor of a long-established lettings agency, it is obviously a very uncertain time for us as an organisation.
“LMS Property Management agrees with agents not being able to charge multiple administration or application fees and indeed we have never done so. We understand many agents do and have created their income sources from this, but regulation could have maybe prevented this.
“There are genuine costs incurred in the procurement of a suitable tenant however, we always ensure that no one is put forward for a tenancy if they are likely to not secure the property or fail the application process. The last thing we want to do is cause potential tenants unnecessary costs and indeed further stress.
“We can understand why this situation has occurred, but the ban will all most certainly mean that some letting agents will not be able to continue to trade, or indeed become less transparent with other hidden costs.
“Agents should be allowed to cover their costs and there are various costs involved within the administrational process. Agents may have to pass on these costs to the landlord and the knock-on effect will probably be that landlords then increase the rents to cover this. Jobs will be lost and rents increase so it is hard to see how this ban protects the public.
“Regulation would be a better way forward and more information given to the public about fees and transparency is needed as there are a whole host of fees tenants are charged that need addressing but as above agencies do have overheads and costs and these need to be accounted for in order to continue trading.”
Asif Nazir, representing both Oak Property Associates and Open House in Rochdale, said: “It is an extremely one-sided view in terms of stopping the letting fees. There needs to be a balance between rogue tenants and fair, good landlords and agents who try to make a living in a very competitive industry.
“Politicians and policy makers currently show a huge bias towards rogue tenants and this is unfair to letting agents and landlords who provide a generally decent service for all people concerned.
“If anything, there should be a ceiling on it; this I could accept.”
Lee Collins, Chief Executive of Revilo Homes in Milnrow, said: “We have perhaps a more unique perspective, given we are large residential and commercial landlords, as well as owning a local estate agency.
“In short, the proposals are nonsense and a waste of government time. Any attempts by central government to fix costs and impose restrictions will simply see rents rise, as landlords will understandable need to cover these increased costs. It never ceases to amaze me how little credit good landlords get for providing an invaluable service. Where would the UK be today if these properties were not available to rent?
“We have a number of hardworking tenants currently who do not have a perfect credit history through mistakes they have made in the past and which would not be accepted by all landlords, despite the fact they are model clients and who pay on time. Without the option for us to take a view on deposits required, we would have to reject some of these tenants out of hand as being not credit worthy.
“It is a romantic idea to think that across the UK landlords are snapping up every property that comes to market and therefore driving prices up across the board. It is utter nonsense, aside from in geographical hot spots like some major cities. Most landlords have seen very little capital growth on their investments over the last ten years, and there is still an abundance of properties on the market at very attractive prices in most areas across the UK. Attractive in terms of value for money, but not necessarily within the reach of first-time buyers.
“However, that is not because of the activity of landlords but because UK wage growth is at an all-time low in real terms, despite the number of unemployed being at record lows, because the UK continues to lag behind in terms of its productivity. In addition to that, the market for credit available to buyers, especially first-time buyers, is still dysfunctional from the financial crash of 2008. It is almost impossible for people with little or no credit history and without a large deposit to buy a house in the UK today. That has nothing whatsoever to do with landlords and the rental market.
“By all means target those landlords and agents who act illegally, but stop talking and acting as if residential landlords are the cause of the issue and start valuing the service they provide, as without them I would love to know what the government’s plan B is – they simply do not have one.
“If the government wants to help, it needs to tackle the real issues in the UK today and not seek to steal headlines that will do nothing whatsoever to help people looking to rent from good landlords.
"We buy our tenants gifts at Christmas as a thank you for their business, and we welcome every new tenant with a thank you card and flowers when they move into their new home. Not all landlords are the same.”