What do you think about letting agent fees? MPs want to hear from you

agrinnall · 26 August 2017 at 2:51PM

Having been both a tenant and a landlord in Scotland before relocating to England (as a homeowner) I find it utterly baffling that fees have still not been abolished. The Scottish system works perfectly well, and the only possible reason I can see why something like it hasn't been implemented in England is that a majority of MPs are either LLs themselves or are on the receiving end of backhanders from those who benefit directly from fees.

Any MP who opposes reform should find themselves on a not to be reselected list at the next election, and their constituents should be made fully aware of their position on the issue.

gregsta1 · 4 September 2017 at 3:03PM

Hi All
First time posting here.

I think what a lot of people fail to understand is that it's the tenants who take up 90% of the letting agents' time (and therefore, money).

Removing the ability for agents to charge tenants fees according to how much work those tenants will be, means that agents will have to be more selective in which tenants they work with. This will further the gap between the affluent and the disadvantaged.

At least at the moment if an agent has 3 tenants from a low-income background vs 1 tenant from a high-income background applying for the same property the agent has no preference because they will either have less work to do or they will be paid for their work, so it equals out at the end of the day right now. In the future, if fees are banned completely, the agent will always have to choose the affluent person who will comply with all requests quickly and will not waste any agency time.

Another point, tenants contact agents A LOT during their tenancy with all sorts of questions and needing all sort of support. If it was a private landlord the tenant would not be asking as much. If agency fees are banned and agents then only work for the landlord (because right now we see ourselves as working for both tenants and landlords) then agents will have to refuse to answer a lot of these questions and explain that they no longer work for the tenants and that they should instead contact their local council or citizen's advice centre.

We prefer helping our tenants when they need us, however, we are not a charity and if we are not allowed to charge our tenants in the future then we will have to change our business model.

I believe the economy does best when government gets out of the way and lets the market forces determine how things work. If an agent charges too much or unfairly, they will lose business and people will stop using them (just look at Foxton's share price for example - down 3/4th since a little while ago).

I hope government thinks about this carefully before muddling it up too much, but we'll wait and see. Our small family business will survive, either way, it's just what the business will be like on the other side of this that is the question.

Crashy_Time · 4 September 2017 at 3:08PM

When the agents can`t stay afloat on gouging tenants for fees, they will be forced to switch to trying to talk sense into deluded sellers so they can earn a crust from sales.......very interesting times!

Guest101 · 4 September 2017 at 3:17PM

gregsta1 wrote: »

Hi All
First time posting here.

I think what a lot of people fail to understand is that it's the tenants who take up 90% of the letting agents' time (and therefore, money). - The tenants also pay the majority of the income that letting agents receive? It's like saying passengers take up 90% of time for taxi drivers...

Removing the ability for agents to charge tenants fees according to how much work those tenants will be, means that agents will have to be more selective in which tenants they work with. This will further the gap between the affluent and the disadvantaged. - By that virtue they'll have to be more selective which properties they market. Which will then mean a new agency will market those properties.

At least at the moment if an agent has 3 tenants from a low-income background vs 1 tenant from a high-income background applying for the same property the agent has no preference because they will either have less work to do or they will be paid for their work, so it equals out at the end of the day right now. - If an agents is taking application fees from 4 people for one property, the problem is the agent not the tenants. In the future, if fees are banned completely, the agent will always have to choose the affluent person who will comply with all requests quickly and will not waste any agency time. - The affluent aren't going to be renting the cheaper housing....

Another point, tenants contact agents A LOT during their tenancy with all sorts of questions and needing all sort of support. - that's what a management contract is for. The agent also takes 10-15% of the rent to compensate for that contact. If it was a private landlord the tenant would not be asking as much. - really you think so? If agency fees are banned and agents then only work for the landlord (because right now we see ourselves as working for both tenants and landlords) - then your wrong. By virtue of the law of agency, you MUST work for the benefit of the landlord. That is the law. learn it. then agents will have to refuse to answer a lot of these questions and explain that they no longer work for the tenants and that they should instead contact their local council or citizen's advice centre. - Suggest you do some very basic research....

We prefer helping our tenants when they need us - you have 0 tenants. , however, we are not a charity and if we are not allowed to charge our tenants in the future then we will have to change our business model. - you should only ever charge your client, you have no contract with the tenant on an ongoing basis.

I believe the economy does best when government gets out of the way and lets the market forces determine how things work. If an agent charges too much or unfairly, they will lose business and people will stop using them (just look at Foxton's share price for example - down 3/4th since a little while ago). - The tenants doesn't choose the agent, the landlord does.

I hope government thinks about this carefully before muddling it up too much, but we'll wait and see. Our small family business will survive, either way, it's just what the business will be like on the other side of this that is the question.

Small, family business.... - sounds more incompetent and ignorant.

aerie · 4 September 2017 at 3:32PM

Any fees charged should transparent and linked to the actual cost incurred by the letting agent. What exactly do 'admin fees' supposedly cover?

I paid around £100 admin fees to receive a terrible disorganised service. We almost were not allowed to move in as they took up until the day before our moving date to sort out references, not informing the LL. They then provided us with the wrong bank details to pay the LL.

And these are one of the 'better' agents in the area.

Out,_Vile_Jelly · 4 September 2017 at 4:13PM

If letting agents were required to undergo professional training that included basic housing law then they might be justified in charging fees for their "services".

I was told by an agent it was "against the law" for me to contact my LL direct, after I'd done so to confirm that we were both happy to go on a periodic contract and not pay the unnecessary fee. It is outrageous that people who have such power over people's lives are so unqualified and can lie so shamelessly.

Crashy_Time · 4 September 2017 at 4:36PM

Out,_Vile_Jelly wrote: »

If letting agents were required to undergo professional training that included basic housing law then they might be justified in charging fees for their "services".

I was told by an agent it was "against the law" for me to contact my LL direct, after I'd done so to confirm that we were both happy to go on a periodic contract and not pay the unnecessary fee. It is outrageous that people who have such power over people's lives are so unqualified and can lie so shamelessly.

Laughable. Best bet is to always contact the landlord direct when the agent is not performing, tends to keep them on their toes.

PasturesNew · 4 September 2017 at 4:56PM

Agents used to have enough property on their books to make a living from the 10% they charged the landlords. There were no other fees.

You saw, you said "yes", you gave your deposit and rent up front, you moved in. Nonsense-free.

It's also easier to find a home with fewer agents who each have more properties.

It used to be, say, 5 agents in an area, each with 100 properties on their books; that would now be 25 agents in an area, each with 20 properties on their books.

If they can't make a living from the business, then it's just unfair to start charging the public for work they should be doing anyway to run their business.

It's better to have 1-2 agents in a small area with all the properties ...than 10-20 agents who you can't get hold of, or "you missed that one" and all the other silliness you get when trying to contact them about the one property you see advertised.

Guest101 · 4 September 2017 at 5:01PM

PasturesNew wrote: »

Agents used to have enough property on their books to make a living from the 10% they charged the landlords. There were no other fees.

You saw, you said "yes", you gave your deposit and rent up front, you moved in. Nonsense-free.

It's also easier to find a home with fewer agents who each have more properties.

It used to be, say, 5 agents in an area, each with 100 properties on their books; that would now be 25 agents in an area, each with 20 properties on their books.

If they can't make a living from the business, then it's just unfair to start charging the public for work they should be doing anyway to run their business.

It's better to have 1-2 agents in a small area with all the properties ...than 10-20 agents who you can't get hold of, or "you missed that one" and all the other silliness you get when trying to contact them about the one property you see advertised.

Agents always had to supplement their income to some degree.

For example, even with 100 properties in an area, the 10% fee would be £50/60 a month on avg, so £5-6,000 per month income. When you take into account business costs and wages, there is very little there.

Now that said, most agencies have well in excess of 100 properties on their books.

Partly they make money on interest on deposits (though not huge amounts)

Partly they make money from referrals (energy/insurance/etc)

The most lucrative ofcourse is the fees

theartfullodger · 4 September 2017 at 5:13PM

Kev is a Con, a Tory, founder of a lettings agent.... This meeting will be a waste of time...
http://www.propertyindustryeye.com/hunters-founder-mp-kevin-hollinrake-case-for-capping-letting-agent-fees/

But, speaking as a Scottish & English landlord, ban fees as in Scotland: Fairer, clearer pricing for tenants. And while you are at it, bring in mandatory landlord registration for landlords. (One minor advantage, it helps - a little - to weed out the rogue landlords that nobody wants...)

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What do you think about letting agent fees? MPs want to hear from you

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