Ban letting agent fees. (And watch those rents soar instead)

HAMISH_MCTAVISH

Scottish rents soaring after the ban on letting agent fees started being enforced.

A whopping 6.3% in Aberdeen, and 5.1% in Edinburgh.

Figures below for an average 2 bed flat.

THE average rent in the Capital has gone up by more than five per cent in the last measured quarter, pricing many residents out of decent accommodation.

Housing experts had already raised fears that the tightening of legislation regarding fees charged by letting agents would lead to costs being passed on to residents through rent hikes.

A recent report from lettings website Citylets shows these concerns may be well-founded, with the average tenant in Edinburgh now paying £819 per month for accommodation.

The only city with higher rents north of the Border is Aberdeen, where renters can expect to pay £899 for a lease, an increase of 6.3 per cent, compared with Edinburgh’s 5.1 per cent. Glasgow occupants are now paying an average of £612, a 2.2 per cent increase.

Dan Cookson, Citylets’ senior 
analyst, said the rises seem directly related to the “banning of agent fees”.

He said: “Our report for the last quarter of 2012 is significant in that it is the first to cover a period after the changes in the sector in 2012 took hold.

“Two cities have seen some of the biggest rises in rents – Edinburgh and Aberdeen – and these annual increases are the largest experienced in either city during the last five years.

There is a suspicion that the recent banning of agent fees to tenants has had an upward impact on rents. Several agent clients have suggested this to be the case and our data seems to support this view.

http://www.scotsman.com/edinburgh-evening-news/latest-news/average-rent-in-city-up-5-in-a-year-1-2749043

Seems Landlords CAN can pass through increased costs to their tenants after all.

Now, I wonder, which of the usual suspects claimed that was impossible? :whistle:

mulronie

Well the lettings agencies have to fund their dodgy haircuts and shiny suits somehow... what did the politicians expect?!

BobQ

mulronie wrote: »

Well the lettings agencies have to fund their dodgy haircuts and shiny suits somehow... what did the politicians expect?!

But equally the labourer is worthy of their hire........

Pobby

Very sad news.

Graham_Devon

Liz Ely, of Edinburgh Private Tenant’s Action Group, said: “The ban on agents charging fees for arranging leases is not new, but has been in place since the 1984 Rent Scotland act. Some letting agents chose to charge fees and ignore this ruling. However, it was clarified in the summer of 2012. Many tenants are owed significant sums to them by letting agents.

Dodgy landlords and agents again?

wotsthat

My view has always been that letting agents shouldn't be allowed to charge tenants a single penny and all invoices should be sent to the landlord.

Landlords are going to want to pass these on to the tenant but they're in a much better position to dispute invoices with lettings agents and a decent landlord would do so. It would be interesting to know if this is happening and whether the figures on the OP reflect a net increase to tenants.

PasturesNew

Years ago there weren't any fees. Agents simply got paid 10% of each month's rent. They were happy enough and it meant they had to build a proper business, with lots of landlords/properties, rather than having just 10-15 properties on their books and milking everybody.

IveSeenTheLight

HAMISH_MCTAVISH wrote: »

Scottish rents soaring after the ban on letting agent fees started being enforced.

A whopping 6.3% in Aberdeen, and 5.1% in Edinburgh.

Notice you missed that this was on a quarter, not YOY.

Graham_Devon

IveSeenTheLight wrote: »

Notice you missed that this was on a quarter, not YOY.

If this is the case, why on the same article, are landlords saying "were not greedy" as they make ever more profit and pass everything they can to the tenant?

chucknorris

I very rarely use agents anyway, in my experience all they do is wind up the tenants, overcharge both of us (tenants and landlord) and in the meantime take on none of the risk.

wotsthat

Graham_Devon wrote: »

If this is the case, why on the same article, are landlords saying "were not greedy" as they make ever more profit and pass everything they can to the tenant?

If these increases simply represent letting agent charges being passed to tenants then landlord profitability hasn't increased.

If that's the case then sensible landlords should be wondering why a) letting agents are able to make so much money whilst risking zero capital and b) if tenants can pay so much for rent why share it with letting agents.