A letter has been sent out to the national media, highlighting the issues surrounding the forthcoming ban on letting agent fees charged to tenants.
Its signatories include Propertymark chief executives David Cox and Mark Hayward, plus a number of industry heavyweights.
Dear Editor,
As the UK’s largest lettings industry professional body, we work hard to protect tenants in the private rented sector.
We feel it is important to highlight the potential unintended consequences to tenants of the Government’s proposed ban on letting fees. We have also long called for sensible regulation of the sector and believe that the Government now has the ideal opportunity for a long overdue review.
Our objective is to raise and maintain high professional standards in the lettings industry. We recently commissioned independent economic analysis to assess the impact of the letting fees ban.
It found that the ban will have an inadvertent negative impact, with tenants potentially having to pay up to an additional £103 a year in rent as landlords seek to mitigate their increased costs.
Further, we believe it is wrong that the Government intends to ban charging for reference checks, which help tenants to verify their identity, their financial viability and income as well as their suitability as good tenants.
We believe these should be excluded from the ban to ensure that these services can still be provided.
Without this, the Government risks creating a two-tier system where tenants who are harder to reference will be given lower priority – and these tenants are often the ones with lower incomes, or a poorer employment or renting history. It is vital that new measures protect all tenants.
We urge the Government to reconsider its current proposals to include referencing costs as part of the ban to protect the more financially vulnerable tenants in society, and to use the time for a more comprehensive review of regulation in the private rented sector.
Yours sincerely,
David Cox, Chief Executive, ARLA Propertymark
Ian Maclean, Franchise Director, Belvoir
Richard Davies, Head of Lettings, Chestertons
Stephen Nation, Group Lettings Managing Director, Connells Group
Sam Tyrer, Managing Director of Sales and Lettings, Countrywide
Jeff Doble, Chief Executive, Dexters
Lucy Morton, Head of Agency, Jones Lang LaSalle (JLL)
Mark Hayward, Chief Executive, NAEA Propertymark
Ian Wilson, Chief Executive Officer, Property Franchise Group
Peter Kavanagh, Managing Director, Property Services Holdings on behalf of Leaders and Romans
Jane Cronwright-Brown, National Head of Lettings, Savills
Paul Sloan, Operations Director, Spicerhaart
Comments (16)
It would be so much simpler if they just capped the fees with an index linked increase so that all the agents charged the same. If a proposed tenant then discovered they were being charged too much they could easily report it. End of problem!! Why make something so simple -complicated?
What a pathetic letter, is this really the best that all these ‘industry heavyweights’ could come up with collectively? Let’s hope the press don’t publish it as it will have a negative effect regarding the fight to overturn the fee ban – £103 per year more – how can this almost irrelevant low figure be accurately quantified and will simply provide more ammunition for Shelter etc to argue their case (they seem to be arguing it a lot better currently than David Cox et al)!
The likely hood is …… only £103, that should be easy for the landlord to absorb (£8.58 PM) from their £800 PM?
No mention of justifying the fee’s charged … i.e what is involved.
I don’t understand how they have come to a figure of £103? Our admin fees I would suggest are conservative bordering on the slightly higher end of the scale in our area and I worked out that if we increased rents by £25 extra per month this would cover the shortfall in our increased fees to landlords and give a little bit more.
£8.60 extra per month does not equate to the amount you would need to recover as a loss of the letting fee ban, in fact no where near – what’s more, my business is based in the North West where rents and fees are cheaper – I can’t imagine what London agents would need to increase by to recover the loss.
How are they doing this, leaving I mean?
We signed up at the outset when it seemed like a good idea (biggggg mistake) and now they say we can’t leave until after 5 years has expired! Meantime, almost no leads.
It’s clear to everybody apart from them that it will fail or merge at some point.
How much does a reference cost these days , basic one £10, more advanced £20?
I don’t think a tenant would have a problem paying those costs, but sadly when its inflated by some agents to £60 – £100, then that is when the problem start.
The problem is some are charging £500!
While I do not charge or agree with that outrageous charge, quoting £10 ro £20 doesn’t help as that is what a refrerence company provides for their checks and if that is all you do then that is not referencing a tenant, there is more involved and that has costs to be covered, add in regional diferences with overheads, the lower rental areas in the UK will suffer more than London hikes, who can absorb. You run a business to make a profit (within reason!!!) not to make a loss or just cover costs, otherwise whats the point in getting out of bed? Sensible fee’s should be allowed to cover service provided, one hat does not fit all.
Are we moving into an era of lettings becoming a charity? Everything seems to be anti-pofit and I can’t recall any other industry that is told it can not make a profit, if you do we will tax more and then take away the rest from you, anyway we can. Then put the boot in with doing the donkeywork for free on immigration etc.
agree on the referencing, but that is all most of the companies listed above do…
a friend has just rented through CW, and he only had to complete a link from the referencing company and take in his passport on sign up – job done – tenant fees £450
Agreed and I was talking about another big corporate.
The ingredients for a meal in a restaurant cost maybe 20-30% of the price you pay, the rest goes to cover the cost of the overheads that have to be paid to successfully run a business. perhaps you should offer only to pay for the raw materials next time you dine out and see how far you get. The same goes for evrything else you buy.
Looks like a list of the people who caused the problem in the first place
Just need to add Foxtons and a few others likes Townends and you have a full house
The really important issue is that Letting Fees are a tactical issue, where is the overarching property strategy from the Government rather than a headline grabbing story.
What do generation Rent want?
Do they seek flexibility?
What will happen to the supply chain if say 20% of private Landlords cashed in?
Critically when you apply primary legislation you need to enforce it and punish those who break the law? Who will provide this and how will the consumer benefit if there are less Letting Agents?
So as an industry we are a small cog in the engine of property and people’s lifestyle, don’t get dragged into tactics but urge the next Government to provide that strategic vision for the next 20 years.
Please!
So we will be able to invoice Government for right to rent checks, after all they are the one demanding all these extra services – well there’s an idea!
Will,
To the point and purposely facetious.
I couldn’t couldn’t agree more!
And to be fair with respect to the other negative posts, the narrative is written to appeal to both government and the general public. It could have perhaps been a little stronger however it does outline the issues. This is not about the £103. It is about the less privileged persons within society being most impacted by the change.
Another poorly considered issue by our leaders.
Now get out there and sell.
£103 per YEAR??? That’s less than £2 per week. What a pointless excercise. The letter they wrote is weak, misses many other valid points and is laughable. Surely we need to charge fees but on an approved scale whereby they are essentially capped to stop unfair practice. It would be an easy excercise to create a scale of fees that could be visible in every agents website and offices etc? Surely this is the sensible way forwards?
£103 a year!
If that’s all it is the tenants will be much better off even with average admin fees…
I hope it was a typo and is supposed to say month or these people are daft!