The National Approved Letting Scheme (NALS) is launching a Fair Fees Forum.
Separately, an independent agent is launching a website where agents can sign up to a scheme called Fair Renting Agents, where agents agree to cap their fees over the term of a tenancy, allowing tenants to shop around.
Mark Reynolds, of Bedfordshire and Hertfordshire agents Pierce, said that he had consulted with other agents to come up with the idea.
Agents would have an entry on the website after signing up to the charter; tenants would be able to check local agents, and see how much they would be spending; they could also use the online calculator to check the rent they could afford.
Separately, the NALS initiative said it hopes to bring industry, trading standards and consumer groups together to discuss the creation of a fair fees charter for the private rented sector.
The Fair Fees Forum will explore whether a cap on upfront tenant fees is practical and enforceable, while also examining a uniform format to outline clearly the exact fees charged to tenants.
The issue of letting agent fees in England refuses to go away, with increasing numbers of tenant organisations pushing for an outright ban on fees.
The Forum will work together to consider fees and ensure agents are still paid for the work they do setting up a tenancy, while looking at a way to curb the fee excesses that may have crept into some parts of the market.
Backing for a cap on fees has been led by NALS, and is said to be gaining support across the industry.
NALS asked 1,000 of its letting agent firms based in England if they would agree that a cap on their fees might be appropriate, as opposed to an outright ban.
Of the 365 agents who replied, 84% agreed with the idea of a cap, as they believed they were already charging a fair fee for their services, and would fall within any proposed limit.
This was borne out in NALS research which also showed that, on average, the fees letting agents charge per tenant were £172 – significantly below the national average of £233 reported in the English Survey of Housing and recent figures quoted by the Citizens Advice Bureau.
Isobel Thomson, chief executive of NALS, said: “Ultimately this is about creating an equitable solution for all. The truth is, a good private rented sector cannot be free, and nor should it be.
“Agents should be paid for the work they do, but equally tenants should know they are paying a reasonable fee that has been explained to them clearly: nothing hidden, nothing excessive.
“The private rented sector faces the widely held misconception that all letting agent fees are sky high, and should therefore be banned. In fact, the bulk of letting agents are charging tenants a fair fee for their service.
“Where they aren’t, we believe excessive fess should be curbed.”
She added: “This is not a talking shop – it’s time to act on excessive tenant fees.”
Comments (11)
According to this website a London agent should charge £1225 in fees.
Based on a 12 month London tenancy for 2 at £2500 a month.
That’s crazy.
Reduce the rent to £900 a month and the fee comes down to £457.
Needs some work I think.
*prices are quoted without VAT
As a landlord of 15 properties I have now edged towards using openrent.co.uk rather than an agent. I use tenant find only and manage the properties myself. This is a reluctant move pushed by market forces. It saves me £1000 approximately and my tenant £500.
From a small sample of my last 7 tenant finds using openrent.co.uk I have found 7 excellent tenants faster (I used an agent at the same time) and cheaper (free).
I never wanted to go down this route due to hassle and potentially bad tenants but the risk reward has tilted in favour of openrent.
If any agent can persuade me to return then I’m all ears, but at the moment I will continue to use openrent.
As a landlord of 15 properties you will have a great deal of experience and knowledge and it makes sense for you to move to openrent 🙂
By my estimations the maximum fee for the package “ADVERTISING & RENT NOW”, along with an Inventory with Checkin and checkout, photos & floorplan comes to £288 which for a managed landlord is a reasonable fee for an agent to charge. We only charge slightly more than this (still under £300) but you also get our time and expertise to boot.
For a small landlord or incidental landlord, the services of an agent who keeps your tenancy legally complaint and smooth running is invaluable, especially when it comes to changes in legislation (think Right To Rent).
PS we are based in Buckinghamshire to give you a comparison for where you are.
Milton Keynes or Beaconsfield? 😉
Near Milton Keynes
Many Agents provide a let only servce for around £300 and do all the work for you. Send me your photos, arrange your viewings and complete your own check in with all the relevant documentation and I will upload to same portals as Openrent and I will only charge you £75
Indeed if a landlord wants to do everything but the referencing/marketing and contract then a tenant charge and a nominal landlord fee is perfectly sufficient for a small operator.
when will they ever stop pounding the estate agency industry? where are ARLA & NAEA on all this? isn’t it up to applicants looking to rent a property to ask before hand what the charges are? Restaurants charge 400% mark up on wine, so who is complaining about that? lets not discuss solicitor fees either!! we publish our fees like a wine list before you buy, so wheres the problem!
I think this is a good idea. I am naturally cautious about any Government intervention as it usually is ill-thought through and sometimes with horrendous consequences (there is no finer example than Osborne’s restriction on finance relief). However something has to stop unfair charges. An agent local to me charges ridiculous rates for carrying out a reference and especially so for anyone with a dog as the dog requires references from their vet too.
A scheme which helps to reduce unfair charges without Government intervention must be a good thing.
Reads:
* an independent agent is launching a website where agents can sign up to a scheme called Fair Renting Agents, where agents agree to cap their fees
Caution: Agents agreeing to CAP fees will be seen as good by some. Others may see CAPs too high and collective and suggest unfair to consumers.
Obviously intended for good, but people like Shelter may attack if this or that is collectively seen as a few too many pounds here or there.