A majority of letting agents believe that rents will rise by 5% to 10% per month once the fees ban is introduced.
Only a tiny proportion (1.33%) are in favour of the ban, with 79% in favour of a cap.
These are two of the findings by guaranteed rent firm Rent4sure, which surveyed 452 letting agents from around the country to ask for their views.
While about 40% think rents will rise by 5% to 10%, 25% think rents will go up by between 1% and 5%, and nearly 20% think the rise will be 10-15%. The remainder think that rents could rise upwards of 15%.
The agents overwhelmingly (92%) said the ban will affect the profitability of their business.
The findings are in contrast to a claim by Goodlord that most agents were broadly supportive of the ban.
Comments (3)
One landlord I know has never taken a deposit even before it became mandatory to register them. All he did was to divide what would be the normal deposit by 6 and add it to the normal rent. If the tenant stayed more than 6 months he was quids in. The important thing is that he got a much better standard of tenant as he was able to pick and choose from a healthy number of would be tenants attracted by the no deposit offer.
If would be tenants pre vetted themselves at their cost through a leading vetting company this might help the direct landlords. Agents will still loose their historic vetting fees etc though unless they negotiate with their landlord clients.
Where I am now charges a tenant £200 including VAT to reference 2 adults and start the tenancy. Inventory etc all included. Then its the first months rent and the deposit.
Others in my area charge £450+ VAT, then more if they want an inventory!
A cap is definitely a good idea, rather than banning all together. To buy, costs several thousand for the deposit, plus £800-£1500 for the solicitor, £300ish for the survey and possibly a charge for the mortgage broker too (who will probably get paid by the lender as well!) Suddenly £200 isn’t looking so bad, especially when you consider that you will get your deposit back if you have looked after the property…
All very alarmist. The maths are not difficult.
What is your income from tenant fees as a percentage of your income from landlords.
Apply that percentage to the average fee (as percentage of rent) you charge landlords.
The answer is how much the rent would need to increase to cover the fee ban – assuming you charge your landlords what you previously charged your tenants.
For those who think the rent increase will need to be above 5% then you are either in a very low rent area or you have been one of the agents who have caused the press and Government to claim that all agents are ‘over charging’ tenants.
The fact is the ban will happen. Frankly we all find a way to make it work positively rather than sound like turkeys whingeing about the Christmas that was created by a few of our more unscrupulous competitors.