Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • UKParliament
      Verified User verified user
    • By UKParliament Verified User verified user 25th Aug 17, 2:36 PM
    • 692Posts
    • 546Thanks
    UKParliament
    What do you think about letting agent fees? MPs want to hear from you
    • #1
    • 25th Aug 17, 2:36 PM
    What do you think about letting agent fees? MPs want to hear from you 25th Aug 17 at 2:36 PM
    Kevin Hollinrake MP wants to hear your views on the proposed ban on letting agent fees.

    He has secured a Westminster Hall debate in the House of Commons on Wednesday 6 September.

    In particular, he would like your views and experiences of the following to help inform the debate:
    • What are your experiences of letting agent fees?
    • Which fees do you consider fair and which do you consider unfair?
    • 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?
    • Tenant fees can vary significantly – do you take these differences into account when looking to rent a property?
    • Would you welcome the licensing of agents and landlords?

    Your comments will be summarised and shared with MPs to use in the debate.

    You will be able to watch the debate on Parliament TV and we will update this thread once the debate has taken place.
    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
Page 2
    • theartfullodger
    • By theartfullodger 4th Sep 17, 5:13 PM
    • 9,057 Posts
    • 11,981 Thanks
    theartfullodger
    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...)
    Last edited by theartfullodger; 04-09-2017 at 5:16 PM.
    • leslieknope
    • By leslieknope 4th Sep 17, 6:34 PM
    • 307 Posts
    • 459 Thanks
    leslieknope
    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
    • By agrinnall 4th Sep 17, 7:02 PM
    • 18,543 Posts
    • 14,272 Thanks
    agrinnall

    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.
    Originally posted by gregsta1
    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
    • By Bearly 4th Sep 17, 7:28 PM
    • 15 Posts
    • 10 Thanks
    Bearly
    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
    Last edited by Bearly; 04-09-2017 at 7:35 PM.
    • itchyfeet123
    • By itchyfeet123 4th Sep 17, 8:04 PM
    • 398 Posts
    • 461 Thanks
    itchyfeet123
    Imagine if seller's agents charged fees. £2k for passing an offer on to the seller. £500 for a counter offer.
    • BBH123
    • By BBH123 5th Sep 17, 9:04 AM
    • 477 Posts
    • 718 Thanks
    BBH123
    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
    • By Crashy Time 5th Sep 17, 2:31 PM
    • 5,230 Posts
    • 2,209 Thanks
    Crashy Time
    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 .
    Originally posted by BBH123

    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
      Verified User verified user
    • By KevinHollinrakeMP Verified User verified user 5th Sep 17, 3:04 PM
    • 1 Posts
    • 3 Thanks
    KevinHollinrakeMP
    Your contributions
    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
    • By saajan_12 5th Sep 17, 3:35 PM
    • 962 Posts
    • 652 Thanks
    saajan_12
    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.
    • volare11512
    • By volare11512 5th Sep 17, 4:22 PM
    • 25 Posts
    • 17 Thanks
    volare11512
    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
      Verified User verified user
    • By UKParliament Verified User verified user 5th Sep 17, 4:54 PM
    • 692 Posts
    • 546 Thanks
    UKParliament
    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
    Originally posted by KevinHollinrakeMP
    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
    • Jeremy1960
    • By Jeremy1960 6th Sep 17, 8:04 AM
    • 1 Posts
    • 0 Thanks
    Jeremy1960
    The issue that I as a landlord and letting agent have is that these forums only ever attract the aggrieved never the content!
    As a landlord of 20+ years I have never had 1 tenant complain about the cost of renting, the fees or my properties. As an agent of 25+ years I cannot recall a single tenant walking away because of fees, my office arranges 100+ tenancies a year, it is a miniscule number who are aggrieved, government would be better to use their efforts to enforce the hundreds of bits of current legislation, overnight if they did the market would sort itself out! So many agents ignore legislation such as displaying fees because they can get away with it.
    On a couple of points on this forum, renewal fees, these are charged as there is work involved, it is not as simple as just printing a piece of paper! Tenants should pay reference fees as it is they who need to show their worth, remove the fees and the not so squeaky clean or easy to process tenants will lose out! Time is money, let all the people who want to ban fees take a 20% reduction in pay and see how they like it because that's what this ban will amount to. Rents will rise, not maybe initially or for new tenants but existing tenants will pay dearly for the folly of pandering to organisations such as shelter.
    You reap what you sow - BEWARE!
    • agrinnall
    • By agrinnall 6th Sep 17, 8:16 AM
    • 18,543 Posts
    • 14,272 Thanks
    agrinnall

    You reap what you sow - BEWARE!
    Originally posted by Jeremy1960
    I have one word for you Jeremy (and to be fair, it's the same word that I always use when this argument is put forward) - Scotland!
    • volare11512
    • By volare11512 6th Sep 17, 8:30 AM
    • 25 Posts
    • 17 Thanks
    volare11512
    If you use a highstreet job agency I doubt you would pay a holding fee for the job, admin fees for the paperwork + arranging interviews, another fee for organising your references nor some other fee where you are asked to contribute towards office space, lighting, heating... etc.

    Letting agents became too greedy and have now shot themselves in the foot. This debate will show just how much MPs are there to serve the people as 1 in 5 are landlords!
    • tom9980
    • By tom9980 6th Sep 17, 8:55 AM
    • 1,233 Posts
    • 3,704 Thanks
    tom9980
    As a landlord I have never charged tenants hidden fees I have only previously asked for referencing fees at cost. I have now also decided to stop charging referencing fees and charge no fees at all. Yes that now means my tenants should expect my rents to stay closer to market levels rather than below those rates but I can afford this because I cut out agents from the equation and refuse to use them.

    I would also support landlord licensing as long as the fee only covers the costs of the councils work. Ideally this would be renewable every 5 years and all the landlords property would be inspected during the process to ensure they meet minimum standards. The added benefit of licensing would allow hmrc to find all those tax dodging landlords.

    I am not adverse to tenants enjoying a bit more security of tenure either however big changes need to be made in how troublesome tenants are evicted, currently the average time to evict through the courts is 40+ weeks, this needs to be slashed to 12 weeks. This for me is the biggest problem landlords face and causes perfectly decent tenants many problems finding decent homes because of how risk adverse you need to be selecting a new tenant.
    “In order to change, we must be sick and tired of being sick and tired.”
    • Risingholm
    • By Risingholm 6th Sep 17, 9:35 AM
    • 1 Posts
    • 0 Thanks
    Risingholm
    As you can see, this is my first post and I am giving my opinion on this particular subject.

    I am a letting agent in Devon, my managed portfolio stands at almost 300 and I carry out 'tenant find' rentals also.

    Most of the local agents charge agency administration fees of circa £350 to £500 on top of then the first months rent and deposit. My firm charges just £204 (£170 plus VAT) for the property and that includes referencing on all adult tenants, all the paperwork, written & photographic inventory, check-in and check-out. My firm carries out it's own referencing and does not use a 'call centre' agency.

    As an agent, I would be happy to see agency administration fee's capped.

    An interesting point to make, I saw someone mention agencies charge between 10% and 15% of monthly rent.....really? here the average rate is 8% and even that gets undercut from time to time.
    • Guest101
    • By Guest101 6th Sep 17, 9:47 AM
    • 15,128 Posts
    • 14,763 Thanks
    Guest101
    The issue that I as a landlord and letting agent have is that these forums only ever attract the aggrieved never the content! - Happy and content people rarely need advice....
    As a landlord of 20+ years I have never had 1 tenant complain about the cost of renting - Very few do to their LL , the fees - depends on how reasonable your fees are (I still don't understand how you are both a LL and LA, unless you're agent to other LLs) or my properties. As an agent of 25+ years I cannot recall a single tenant walking away because of fees - usually because they need somewhere to live, crazy I know! , my office arranges 100+ tenancies a year - one every 3 days? One man band? , it is a miniscule number - it is indeed. who are aggrieved, government would be better to use their efforts to enforce the hundreds of bits of current legislation, overnight if they did the market would sort itself out! So many agents ignore legislation such as displaying fees because they can get away with it. - really? that's the legislation you're concerned with?
    On a couple of points on this forum, renewal fees, these are charged as there is work involved, it is not as simple as just printing a piece of paper! - you're right, you have to change the date too. Don't try it on here, many posters will have a better knowledge than you. Tenants should pay reference fees as it is they who need to show their worth - what a load of cobblers. The checks for tenancy are for the LLs benefit, you work for the LL. , remove the fees and the not so squeaky clean or easy to process tenants will lose out! -why? Time is money, let all the people who want to ban fees take a 20% reduction in pay and see how they like it because that's what this ban will amount to. - boohoo Rents will rise - evidence? in Scotland they didn't. , not maybe initially or for new tenants but existing tenants will pay dearly for the folly of pandering to organisations such as shelter.
    You reap what you sow - BEWARE!
    Originally posted by Jeremy1960

    Which letting agency do you run? If you stand by your convictions you wont mind naming yourself
    • Guest101
    • By Guest101 6th Sep 17, 9:52 AM
    • 15,128 Posts
    • 14,763 Thanks
    Guest101
    As you can see, this is my first post and I am giving my opinion on this particular subject.

    I am a letting agent in Devon, my managed portfolio stands at almost 300 and I carry out 'tenant find' rentals also. - decent number. quick search on RM suggest a 2 bed is approx. £600 per month, so we'll use that as an average. That should give you a turnover of £216,000 per year in management fees at the lower end of 10%.

    Most of the local agents charge agency administration fees of circa £350 to £500 on top of then the first months rent and deposit. My firm charges just £204 (£170 plus VAT) for the property - interesting... and that includes referencing on all adult tenants - for the landlord , all the paperwork - for the landlord, written & photographic inventory - for the landlord, check-in and check-out - for the landlord. My firm carries out it's own referencing and does not use a 'call centre' agency. - you are charging the tenant for a service for the landlord....

    As an agent, I would be happy to see agency administration fee's capped.

    An interesting point to make, I saw someone mention agencies charge between 10% and 15% of monthly rent.....really? here the average rate is 8% and even that gets undercut from time to time.
    Originally posted by Risingholm


    I'll lower my above figure given you say it's 8% (usually it's more)= £172,800


    For a stand alone business which requires no more than two employees that seems pretty decent
    • Guest101
    • By Guest101 6th Sep 17, 9:54 AM
    • 15,128 Posts
    • 14,763 Thanks
    Guest101
    As a landlord I have never charged tenants hidden fees I have only previously asked for referencing fees at cost. I have now also decided to stop charging referencing fees and charge no fees at all. Yes that now means my tenants should expect my rents to stay closer to market levels rather than below those rates but I can afford this because I cut out agents from the equation and refuse to use them.

    I would also support landlord licensing as long as the fee only covers the costs of the councils work. Ideally this would be renewable every 5 years and all the landlords property would be inspected during the process to ensure they meet minimum standards. The added benefit of licensing would allow hmrc to find all those tax dodging landlords.

    I am not adverse to tenants enjoying a bit more security of tenure either however big changes need to be made in how troublesome tenants are evicted, currently the average time to evict through the courts is 40+ weeks, this needs to be slashed to 12 weeks. This for me is the biggest problem landlords face and causes perfectly decent tenants many problems finding decent homes because of how risk adverse you need to be selecting a new tenant.
    Originally posted by tom9980
    Whilst I agree with you, the problem is the courts are too busy to accommodate this.
    • Tom54*
    • By Tom54* 6th Sep 17, 10:19 AM
    • 2 Posts
    • 0 Thanks
    Tom54*
    Letting Applicant Fees
    If I apply for a mortgage I undergo thorough checks to ensure that I will be able to meet the monthly payments. I pay the lender an application fee to cover the work involved. Monthly rent payments can be very similar to mortgage payments, often more, and it is right that care is taken to verify the applicant’s ability to meet the financial commitment involved. Is it not unreasonable to have to pay for this service?
    We process around 200 applications per year in our office. We cannot recall the last time a prospective tenant complained about our fees. They seem to understand the process and that there is a reasonable charge for the service. We don’t charge for check-in or check-out but do charge for renewal to reflect the administrative work involved (which is not simply printing out a document).
    Tenant fees represent around 15-20% of our income. In a highly competitive market it is unlikely that landlords will accept much in the way of fee increases. There will certainly be job losses. In an already difficult post-Brexit market with low transaction levels in sales, some mixed service agents will go to the wall.
    Tenants will no longer be clients of ours in any way. We will continue to try to represent their interests as far as we can and to act as a buffer between landlord and tenant when things get difficult, but many agents will no longer bother. There will be a power shift towards landlords.
    Having just conducted a survey of tenant fees amongst our competitors we have been in one or two cases a little shocked at what is being charged for, and how much. I would have to say that the worst offenders (not exclusively but by and large) on our patch are the corporates. We would support a cap on fees.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

868Posts Today

6,572Users online

Martin's Twitter