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

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  • lets take an average property in my area. £800 a month for a 1 bedroom property - already way too high for an average earner to live alone but i digress. this is what one agent would charge me:

    £800 first month's rent up front
    £1200 deposit
    £150 admin fees
    £35 per tenant for referencing
    £150 check in
    £115 check out

    so before i even move in i have to find £2335. if i'm a first time renter i also have to find money to buy furniture. plus there's a (usually) £150 charge for tenancy renewal in 12 months. and if i choose to move or if i'm forced to, i'm going to have to find another £1100ish just to move. it's an impossible situation, coupled with rapidly rising rents, but i don't expect much sympathy from a tory mp who founded a lettings agency.

    how about also addressing the rapid cost in living and doing something about the housing market? people are almost certainly priced out of buying and they're beginning to be priced out of renting.
    CCCC #33: £42/£240
    DFW: £4355/£4405
  • agrinnall
    agrinnall Posts: 23,344
    First Post Combo Breaker
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    gregsta1 wrote: »

    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 would certainly hope so, given how poor your industry's business model is now. I suggest you look at the way the letting industry works in Scotland for some hints on doing it in a way that desn't put you in the same pariah category as politicians and lawyers.
  • Bearly
    Bearly Posts: 15 Forumite
    edited 4 September 2017 at 6:35PM
    What are your experiences of letting agent fees?
    Mainly awful though some agencies do seem to act fairly.

    Which fees do you consider fair and which do you consider unfair?
    Recently I have come across one letting agency charging for a fee when you go on a rolling contract after your initial contract. I also came across another charging tenants a £50 fee every time they do an inspection. These fees I would consider unfair - I think it is quite obvious why they are!

    Also check in and check out fees I think should be paid for by the landlord not tenant too.

    I think a deposit is reasonable..

    It has been suggested that if the ban is introduced, the fees will simply be transferred from tenant to landlord and then back to tenants in the form of higher rents – how do you feel about this?
    I don't see this being the case - rents seem to be high already. I think landlords should be the ones paying for the fees.

    Tenant fees can vary significantly – do you take these differences into account when looking to rent a property?
    Yes I do because if an agency is happy to charge tenants fees I think are ridiculous I can only imagine how they will behave if an issue with the property came up - so prefer to deal with agencies who are more reasonable with their fees. This has worked in my favour - the only downside is having to have more patience for a property that fits my specification coming up under my desired agency.

    Would you welcome the licensing of agents and landlords?
    Yes
  • Imagine if seller's agents charged fees. £2k for passing an offer on to the seller. £500 for a counter offer.
  • Its swings and roundabouts the costs will be paid one way or another and if its not through admin fess / costs it will be via higher rent.

    I do think the whole housing industry needs tighter regulation and a cap on fees, it does not cost hundreds of pounds to provide a letter which is usually a template. There should be no resigning fees to extend a lease as the initial checks are done and you will have a history of your tennants payment record.

    At the moment the whole industry is a licence to print money and the normal person in the street has no option to pay because there isnt enough social housing.

    Letting Agents
    Manageing Agents
    Leaseholders
    Freeholders

    The whole industry is due a complete overhaul .
  • Crashy_Time
    Crashy_Time Posts: 13,386
    First Anniversary First Post Name Dropper
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    BBH123 wrote: »
    Its swings and roundabouts the costs will be paid one way or another and if its not through admin fess / costs it will be via higher rent.

    I do think the whole housing industry needs tighter regulation and a cap on fees, it does not cost hundreds of pounds to provide a letter which is usually a template. There should be no resigning fees to extend a lease as the initial checks are done and you will have a history of your tennants payment record.

    At the moment the whole industry is a licence to print money and the normal person in the street has no option to pay because there isnt enough social housing.

    Letting Agents
    Manageing Agents
    Leaseholders
    Freeholders

    The whole industry is due a complete overhaul .


    Sorry to burst your bubble (no pun intended) but without wage rises that won`t fly, unless you mean very low rents being nudged up a touch? Most likely outcome is that a lot of agents go bust. They won`t be missed.
  • KevinHollinrakeMP
    KevinHollinrakeMP Posts: 1 Organisation Representative
    Thank you for your many comments which I have read with great interest. It is quite clear that the majority of tenants want a complete ban on tenant fees, particularly as there is a huge variation in the charges and sometimes applied without apparent justification. I hope you will tune into the debate tomorrow morning but please do continue to contribute, we will read all submissions. Kevin Hollinrake MP
    I am the MP for Thirsk and Malton and here to answer questions and help feed into Parliament.
  • saajan_12
    saajan_12 Posts: 3,593
    First Anniversary Name Dropper First Post Combo Breaker
    Forumite
    Which fees do you consider fair and which do you consider unfair?
    I think mandatory fees which would apply to any rental should not be allowed, as these are the LL's cost of business. e.g.
    - tenancy agreement drafting
    - 1st reference check
    - deposit registration fees
    - inventory / check in / check out
    - renewal fees

    However where a tenant is requires something extra that should be chargeable e.g.
    - additional reference checks (e.g. if mulitple people need to be taken into account to meet the rent)
    - guarantor reference checks
    - deed of guarantee drafting

    Holding deposits should also be allowed, to be refunded/counted towards rent if the tenancy goes ahead or if the LL pulls out. However not refundable if the tenant pulls out or fails reference checks (based on pre stated criteria by the agent).

    It has been suggested that if the ban is introduced, the fees will simply be transferred from tenant to landlord and then back to tenants in the form of higher rents – how do you feel about this?
    This is true and fair, but the benefit of banning fees is to improve transparency and comparability of one total rent figure, thus leading to better competition.
    The downside is that a long term tenant ends up paying more thorugh higher rents for the same initial tenancy set up costs. Instead of higher rents, I think there should be a market standard extra 25% of a month's rent payable if a tenant leaves within a year say.. something to cover the extra changeover costs so these aren't paid running for years, but small enough that a LL would still prefer a long term tenant than the void + this 25% payment, so there's no risk of trying to get tenants out early.

    Tenant fees can vary significantly – do you take these differences into account when looking to rent a property?
    Yes, I used to look at the total cost upfront (less refundable deposits) and add 1/12 of this to the rent when comparing. But I think this should be stated explicitly along with the rent figure in adverts and portals such as RightMove / Zoopla as well as agents websites should have to post this figure as something you can sort by rather than just the rent figure.

    Would you welcome the licensing of agents and landlords?
    Only if this involves providing them with the relevant laws, checks on right to let (ie owns property, consent from lender) etc so you know a licensed LL atleast knows their responsibilities and they won't be evicted because the LL never should have been letting. Otherwise I don't think it's worthwhile to just have a name on a register - the admin cost for councils/licensing authorities would cost more than the benefit and this money could be better spent in providing social housing etc.
  • I think it would be worth acknowledging during the debate the number of MPs who are landlords as I fear this would add a conflict of self interest for improving the rental market for millions of people who are trapped in private renting.

    I am one example of someone who is trapped in the private rental market due to family circumstances and not having additional 'help' to get on a property ladder that I will never see. I have rented in the UK since 2009 and moved on average every 18 months due to the landlord wanting to sell. Each time in England I have been subjected to high agency fees that wipe out my savings each time I move (please also remember that there is also a cost for removals...). I have now moved to Scotland where as a T I have found it far easier to rent.

    Which fees do you consider fair and which do you consider unfair?

    I feel that all fees should be banned which relate to the actual business of renting (setting up the agreement, check in, check out, renewal...)

    I also agree with others that it is fair to charge a holding deposit (like in Scotland) to show serious interest in the property and once the agreement is signed then this deposit is forms part of the DPS scheme. If the T pulls out then as a T i find it fair the deposit is lost and if the L pulls out then the T should be refunded.


    It has been suggested that if the ban is introduced, the fees will simply be transferred from tenant to landlord and then back to tenants in the form of higher rents – how do you feel about this?

    How high can the rental market go whilst wages don't go up. As I struggle to even save (from low interest rates) and my savings are wiped out each time I move I am extremely concerned about my shelter for the long term. I'd have to think about moving from a one bedroom flat to shared accommodation.

    Tenant fees can vary significantly – do you take these differences into account when looking to rent a property?

    I look, but what else can I do? A T is in a weak position to negotiate these fees. Unlike a LL who can shop around, a T doesn't have that choice and all LA pretty much work as cartels because there has been no regulation of the market. I need shelter for myself so I have to pay.

    Would you welcome the licensing of agents and landlords?

    It would be a useful register for Ts to check that a LL/LA is fit for the renting out of properties. As of now the LL checks suitability for a T to live in their property, but a T cannot find out about the financial security of the LL. A very one way street.
  • UKParliament
    UKParliament Posts: 749
    First Anniversary First Post Photogenic Combo Breaker
    Organisation Representative
    Thank you for your many comments which I have read with great interest. It is quite clear that the majority of tenants want a complete ban on tenant fees, particularly as there is a huge variation in the charges and sometimes applied without apparent justification. I hope you will tune into the debate tomorrow morning but please do continue to contribute, we will read all submissions. Kevin Hollinrake MP
    Hi everyone,

    As Kevin Hollinrake MP said, thank you for all of your comments.

    You can watch the Westminster Hall debate tomorrow live from 9.30am on Parliament TV. You can also catch up later using the same link, or read the report on Hansard.

    Westminster Hall debates give MPs an opportunity to raise local or national issues and receive a response from a government minister. You can find out more about them here, or just let me know if you have any questions.
    Official Organisation Representative
    I’m the official organisation rep for the House of Commons. I do not work for or represent the government. I am politically impartial and cannot comment on government policy. Find out more in DOT's Mission Statement.

    MSE has given permission for me to post letting you know about relevant and useful info. You can see my name on the organisations with permission to post list. If you believe I've broken the Forum Rules please report it to forumteam@moneysavingexpert.com. This does NOT imply any form of approval of my organisation by MSE
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