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    • UKParliament
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    • By UKParliament Verified User verified user 25th Aug 17, 2:36 PM
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    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
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    • Guest101
    • By Guest101 6th Sep 17, 10:27 AM
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    Guest101
    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. - apples and oranges. Is it not unreasonable to have to pay for this service? - depends for who's benefit the checks are done.
    We process around 200 applications per year in our office. - are you, yet another, letting agent? We cannot recall the last time a prospective tenant complained about our fees. - because they want to rent a property. But here you go: I'm complaining about your fees. Now you can recall it. They seem to understand the process and that there is a reasonable charge for the service. - the service for the landlord?.... 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). - no you also need to change the date.
    Tenant fees represent around 15-20% of our income. - which means they're too high.... In a highly competitive market it is unlikely that landlords will accept much in the way of fee increases. - unless all agencies do it? hmm... There will certainly be job losses. - oh no.... In an already difficult post-Brexit - that's marketing 101 by the way. On june 24th, marketing managers popped several corks of champagne knowing that any price rise was 'linked to brexit'. market with low transaction levels in sales, some mixed service agents will go to the wall. - oh no...
    Tenants will no longer be clients of ours in any way. - your client is the landlord. That's basic agency law. We will continue to try to represent their interests as far as we can - then you are breaking the law. and to act as a buffer between landlord and tenant when things get difficult - literally that is NOT your job. You MUST protect the Landlords interest at all times. , but many agents will no longer bother. There will be a power shift towards landlords. - so they will do the right thing?
    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.
    Originally posted by Tom54*
    Perhaps you can go on a course which explains basic agency law first?.....


    Kev - this is why the sector needs regulating!
    • Out, Vile Jelly
    • By Out, Vile Jelly 6th Sep 17, 10:28 AM
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    Out, Vile Jelly
    . We cannot recall the last time a prospective tenant complained about our fees. .
    Originally posted by Tom54*
    Well, what will complaining get them- fees waived? Or the offer to go and find somewhere else to live?


    We charge for renewal to reflect the administrative work involved (which is not simply printing out a document).
    Originally posted by Tom54*
    Go on then, enlighten us as to the years of training and professional exams required to process an unecessary tenancy renewal.




    Tenants will no longer be clients of ours in any way.
    Originally posted by Tom54*
    Tenants never have been clients; that's the point. They're paying for services that benefit the LL.
    They are an EYESORES!!!!
    • Tom54*
    • By Tom54* 6th Sep 17, 11:03 AM
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    Tom54*
    You clearly have it in for letting agents. You may have had a bad experience and from what I hear from time to time, you're not alone. I appreciate that there are agents that overcharge and I acknowledge that there are some that do not provide a very good service (sometimes simultaneously..) That's an argument for regulating agents and maybe capping fees.


    I of course understand that ultimately the landlord is the client but we often find ourselves arguing the case for a tenant against a landlord who, possibly to a lack of legal knowledge, may in our view be acting unreasonably. Just in the last half an hour I have persuaded a landlord to lift charges that were to be made against the deposit of a recently vacated tenant. We handle all repair requests from tenants and try to get them all done even where the landlord is not necessarily obliged to carry them out. Recently we were reminding a landlord of a repairing responsibility he had despite the fact the tenant was in arrears.


    I suspect you may not want to hear any of this as it does not suit your agenda but these sorts of things are not uncommon and it is not fair to simply denigrate an entire industry on the basis of a few bad apples.
    • C_Mababejive
    • By C_Mababejive 6th Sep 17, 11:14 AM
    • 10,251 Posts
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    C_Mababejive
    Letting agents are parasites in smart cars and need their fees severely controlled.
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
    • Guest101
    • By Guest101 6th Sep 17, 11:20 AM
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    Guest101
    You clearly have it in for letting agents. - No? I'm scrutinising your business model that's all. You may have had a bad experience and from what I hear from time to time, you're not alone. - nope, never. I'm very knowledgeable in the area. I appreciate that there are agents that overcharge and I acknowledge that there are some that do not provide a very good service (sometimes simultaneously..) That's an argument for regulating agents and maybe capping fees. - You haven't addressed any of the points raised.


    I of course understand that ultimately the landlord is the client - not ultimately. totally. The LL is your client and agency law requires you to look after their interests. but we often find ourselves arguing the case for a tenant against a landlord who, possibly to a lack of legal knowledge, may in our view be acting unreasonably. - that is unfortunately not your job and you are in breach of your duty. Unless ofcourse your arguing that he or she needs to comply with their obligations, in which case you aren't arguing for the tenant at all. Just in the last half an hour I have persuaded a landlord to lift charges that were to be made against the deposit of a recently vacated tenant. - The charges were either due or not. If they were not, then you were looking after your client by preventing them being taken to court. We handle all repair requests from tenants and try to get them all done even where the landlord is not necessarily obliged to carry them out. - in which case you may be in breach of your duty to your client. Recently we were reminding a landlord of a repairing responsibility he had despite the fact the tenant was in arrears. - So you were again protecting your client from costly legal action?


    I suspect you may not want to hear any of this - no I clarified the above quite nicely I think. as it does not suit your agenda but these sorts of things are not uncommon and it is not fair to simply denigrate an entire industry on the basis of a few bad apples.
    Originally posted by Tom54*

    Can you perhaps elaborate on one point. What, outside of changing a date and reprinting, signing and posting a renewal, does the fee cover?
    • leslieknope
    • By leslieknope 6th Sep 17, 1:06 PM
    • 250 Posts
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    leslieknope
    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
    shelter is a charity campaigning for the basic human right of everyone having safe accomodation. the fact you are so dismissive of A CHARITY makes me hope i never come across you. not even as a landlord or letting agent, just as a person. i hope you never find yourself so desperate in life as some of the people who are supported by shelter.
    CCCC #33: £42/£240
    DFW: £4355/£4405
    • x-caitlin-x
    • By x-caitlin-x 6th Sep 17, 1:18 PM
    • 226 Posts
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    x-caitlin-x
    For me, the key thing is that the current set-up prevents any kind of real competition. Tenants have no choice which agency they use (as they have to go where the properties are) but they have to pay the fees. There's no real incentive for landlords to choose a letting agent with lower fees, as they don't feel the impact of those fees. For a market to be fair and competitive, you have to have the person choosing the supplier also be the person paying for it.

    If fees were payable by landlords, then rent might go up. Fine. It's easier for tenants if those costs are spread over the course of a tenancy anyway. Besides, tenants pay those costs either way - this way, they can see exactly what they're going to be paying up front, and can compare properties on a like-for-like basis.

    But I suspect letting agents would also start lowering their fees, as it would become something that landlords consider when choosing an agent.

    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.
    Originally posted by gregsta1
    And then the tenant will contact the landlord directly, who will call you to ask you why you're not doing the job he/she pays you for and talking to the tenant/managing the property. Alternatively, the tenant will contact the local council, CAB or Shelter, and will find out exactly what their rights and obligations are. They will then insist on their rights being granted - again, by contacting the landlord if you refuse to speak to them.

    Where on earth have letting agents got this idea from that they work for the tenant as well as the landlord? Everything that you do is for the benefit of the landlord, by virtue of the fact that if you didn't do it, they would have to!

    We process around 200 applications per year in our office. We cannot recall the last time a prospective tenant complained about our fees.
    Originally posted by Tom54*
    I've rented several different properties in my life (and in London, where the fees are extortionate) and I've never complained about the fees. Why would I? I'm looking for somewhere decent to live that I can afford, and if properties are scarce then I'll pay up and take the hit, no matter how annoyed I am about it. That doesn't mean that there's not a problem, or that nothing needs to be done.

    We... do charge for renewal to reflect the administrative work involved (which is not simply printing out a document).
    Originally posted by Tom54*
    What else is involved, please (other than changing the dates)?
    • Farkle
    • By Farkle 6th Sep 17, 1:22 PM
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    Farkle
    Agents have costs they cannot avoid
    When a prospective tenant has to be referenced then the reference agency requires a payment of between £25 and £50 (ex-VAT) per applicant. If the applicant fails the referencing procedure then why should the landlord have to pay?


    I agree some 'fees' are extortionate, and a landlord should pay for a tenancy agreement and inventory as it's in his own interests to do so.


    Unfortunately one months rent is just not adequate to cover dilapidations, and trying to pursue an ex-tenant for outstanding rent arrears, and damages is nigh impossible.


    All agents should be ARLA Members which would cut out lots of the inadequately trained agents I used to come across. I was very involved in the training of letting agents before retirement so can separate the wheat from the chaff. About 90% of agents are in need of regular training which unfortunately just doesn't happen.
    • Guest101
    • By Guest101 6th Sep 17, 1:33 PM
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    Guest101
    When a prospective tenant has to be referenced then the reference agency requires a payment of between £25 and £50 (ex-VAT) per applicant. If the applicant fails the referencing procedure then why should the landlord have to pay? - You can do a basic credit check for £4. Explain how one fails the referencing procedure?


    I agree some 'fees' are extortionate, and a landlord should pay for a tenancy agreement and inventory as it's in his own interests to do so. - indeed


    Unfortunately one months rent is just not adequate to cover dilapidations, and trying to pursue an ex-tenant for outstanding rent arrears, and damages is nigh impossible. - that why you get insurance?


    All agents should be ARLA Members which would cut out lots of the inadequately trained agents I used to come across. I was very involved in the training of letting agents before retirement so can separate the wheat from the chaff. About 90% of agents are in need of regular training which unfortunately just doesn't happen.
    Originally posted by Farkle
    About 90% of agents have zero training
    • cjdavies
    • By cjdavies 6th Sep 17, 2:08 PM
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    cjdavies
    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.
    Originally posted by Tom54*
    I didn't and not all charge.
    • Johnthecob
    • By Johnthecob 6th Sep 17, 5:04 PM
    • 2 Posts
    • 2 Thanks
    Johnthecob
    Can you perhaps elaborate on one point. What, outside of changing a date and reprinting, signing and posting a renewal, does the fee cover?
    Originally posted by Guest101
    There must be lots of LAs viewing this thread, I'd like to see an answer to this Q.
    • Johnthecob
    • By Johnthecob 6th Sep 17, 5:09 PM
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    Johnthecob
    The Bill for banning LA fees should include provision to allow the reclaiming of unfair fees charged by LA's. This will stop any LA's ignoring the legislation and open up the market for the claims chasers/PPI co's to police the market.
    In fact, why not go the full hog and allow Tennant's to reclaim historic fees? A period of maybe 5-7 years would seem fair to me.
    • Guest101
    • By Guest101 6th Sep 17, 5:13 PM
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    Guest101
    The Bill for banning LA fees should include provision to allow the reclaiming of unfair fees charged by LA's. This will stop any LA's ignoring the legislation and open up the market for the claims chasers/PPI co's to police the market.
    In fact, why not go the full hog and allow Tennant's to reclaim historic fees? A period of maybe 5-7 years would seem fair to me.
    Originally posted by Johnthecob


    Reclaiming fees wouldn't happen, simply due to the nature of the business. Banks are a regulated business, letting agents aren't.


    However the ban will likely be half hearted - the fees are capped, and a number of schemes introduced - same as deposit - which are used for referencing.


    The fees will probably be in the region of £25-50 per applicant.
    • Demz
    • By Demz 6th Sep 17, 9:29 PM
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    Demz
    People keep saying prospective tenants don't complain about the fees. If I have to pay 150+ non refundable to apply (£300 as a couple) for the ideal property that has taken me a long time to find, whilst competing with other tenants, I'm not going to risk complaining and being disliked to lose my money and the accommodation. The last time I rented I had to have £1700 up front to afford a property just under £700 (this is lower end of the market where I live). It's ridiculous and uncalled for. I've paid as little as £25 when dealing directly with landlords so why does it take £150 for an agent to do the same thing baring in mind they'll charge 4/5 other tenants applying for the same property and only one person will get it.

    You tend to pay this fee up front of seeing a contract as well so I've been in a situation where I've applied only to then see a charge of £200 to carry on living at the property after tenancy term is over, so I either sign unwillingly or I lose the £150 I've already paid. Isn't it the same contract that's used for every single tenant an agency deals with most of the time? Happy to pay a reference fee but anything over that is unfair and you rarely have a choice.
    • deannatrois
    • By deannatrois 6th Sep 17, 10:16 PM
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    deannatrois
    I was quite impressed by this debate. It was far more informed than the last one (most of the contributions were well researched - there were two that weren't) and the Minister who spoke towards the end was far more informed (and not a doddering ill informed Tory like the last one). There was one point he raised that I did not agree with but most of the items described were much needed. It was much more positive about introducing a ban on tenancy fees, the last debate wasn't at all.

    It looks like they are going ahead with a bill to ban tenancy fees although at the moment the first one will be just a draft bill. So it may not happen. Time will tell.
    Last edited by deannatrois; 06-09-2017 at 10:20 PM.
    • volare11512
    • By volare11512 6th Sep 17, 10:34 PM
    • 23 Posts
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    volare11512
    I was quite impressed by this debate. It was far more informed than the last one (most of the contributions were well researched - there were two that weren't) and the Minister who spoke towards the end was far more informed (and not a doddering ill informed Tory like the last one). There was one point he raised that I did not agree with but most of the items described were much needed. It was much more positive about introducing a ban on tenancy fees, the last debate wasn't at all.

    It looks like they are going ahead with a bill to ban tenancy fees although at the moment the first one will be just a draft bill. So it may not happen. Time will tell.
    Originally posted by deannatrois
    I came to the same conclusion (and I agree with you about the two who were not well research). I did find it worrying that one MP thought the deposit was to be used to bring the house up to standard pre-tenancy too without any correction. However, I did feel that as a private tenant concerns raised on this forum were mentioned and respectful for those not able to qualify for social housing nor able to buy their own home (like myself).

    This issue really needs sorting out now as those like myself will be retiring under a private rented roof which is going to cost the government more not just in renting benefits, but also in care costs as I will have no money to contribute towards this myself.
    • Crashy Time
    • By Crashy Time 7th Sep 17, 1:24 AM
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    Crashy Time
    The Bill for banning LA fees should include provision to allow the reclaiming of unfair fees charged by LA's. This will stop any LA's ignoring the legislation and open up the market for the claims chasers/PPI co's to police the market.
    In fact, why not go the full hog and allow Tennant's to reclaim historic fees? A period of maybe 5-7 years would seem fair to me.
    Originally posted by Johnthecob

    Never happen, a large % of agents will be out of business by that time.
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