Autumn Statement 2016: Letting agents to be banned from charging tenants upfront fees

jd87

This is fantastic news. Foxtons shares lost 14% today. Can't wait to see them go out of business.

fishpond

As these services that help to get & distinguish good from bad tenants are not free, the tenant, one way or another, will pay, although it may be a more competitive market (cheaper).

wolfplayer

LLs here think everything pushes up rent.

I'm only knowing LLs accepting offers of ever lower rent.

theGrinch

Bluebirdman_of_Alcathays wrote: »

If the tenant will happily pay more why haven't rents gone up already?

rents have gone up consistently in the South at least. Most notably since the hikes in SDLT - probably due in some degree to reduced supply and extra buying costs.

tgroom57

clairesilverspar wrote: »

...

Last year we moved to a place where we were charged £99 for a credit check and referencing fee and that was it. Same checks, still needed employer and landlord references, but much, much cheaper. Much less stressful, quicker service too.

I wish my daughter's fees were less. She paid over £100 just to renew the contract. I'd love to compare costs between LA's, and see what it actually costs to perform these duties.

theGrinch

beeg0d wrote: »

Yes they will to a degree. The difference is competition. Landlords have a choice of agents, tennents dont (at least if they want a specific propety), if an agent charges too much then the LL will goto a different agent or cut the agent out totally and self-manage.

I note the following:

Some private LLs impose charges for the same services. They are most likely to hike rents.

Tenants have choices too if they are flexible.

Bluebirdman_of_Alcathays

theGrinch wrote: »

rents have gone up consistently in the South at least. Most notably since the hikes in SDLT - probably due in some degree to reduced supply and extra buying costs.

I was not referring to recent historical issues.


Take today. Now. If tenants can happily bear an increased rent, why have LLs not put rents up already? It makes no sense. There is a market level for rent. Either all LLs are stupid, and haven't put rent up when the market can bear it, or rents will not rise at the same rate to reflect the changing cost base.


There is a market cost for a Toyota Prius. |It is based on the supply and demand for said car. I don't know it, but suppose it is £10k. If Toyota have an issue with their Aluminium supplier and their costs go up by £500, I do not care - I am not going to pay £10.5k for it.


I am an accountant - I cannot charge my clients more than they are willing to pay. And that's the end of it. I can't fathom why agents, LLs and the media think that somehow property sits outside of normal economic boundaries.

tgroom57

Bluebirdman_of_Alcathays wrote: »

There is a market cost for a Toyota Prius. |It is based on the supply and demand for said car. I don't know it, but suppose it is £10k. If Toyota have an issue with their Aluminium supplier and their costs go up by £500, I do not care - I am not going to pay £10.5k for it.


I am an accountant - I cannot charge my clients more than they are willing to pay. And that's the end of it. I can't fathom why agents, LLs and the media think that somehow property sits outside of normal economic boundaries.

Hardly a fair comparison. Toyota do not charge you for arranging the sale, nor do they charge you an upfront fee to see if they'd like to sell to you.

eddddy

It seems like a downside of this is that there is no deterrent to 'dreamers' and 'fibbers' making endless futile applications to rent - with a series of different agents/LLs.


At the extreme end, perhaps there are desperate/deluded people who will make 20+ applications, in the hope of finding an LL who will accept them - meaning 20+ wasted referencing fees to LLs.


So LLs may be keen to increase rents further, to compensate for failed referencing fees.


The net result is that 'good' tenants, who get accepted, end up subsidising 'bad' applicants, who get rejected.

Crashy_Time

Innys1 wrote: »

They are going up, inexorably - this will just make them go up faster.

If a landlord has a property to let in a popular area, they can simply add the referencing fee to the market rate and still have desperate tenants queueing up.

After all, the remaining landlords in the immediate area will be doing the same - all this announcement means is the market rate in such areas is now higher than it was yesterday.

More likely that agents will now need more revenue from house sales, and will start pressuring deluded sellers to drop their prices, making BTL even more pointless as taxes rises, property values fall, more and more young people just stay at home and work in the local Sainsbury, and HB gets pared back. Just my opinion of course.