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

MobileSaver

Crashy_Time wrote: »

Guys, rents = up just isn`t going to happen, do the sums, feel the sentiment, we are in new un-charted waters. If you have multiple BTL`s it is time to start selling them, and being VERY nice to prospective buyers.

Ha ha, Crashy you've been wrong for over 10 years waiting for "sentiment" to cause a house price crash!

Why would BTLers sell now when they have people like you who happily choose to pay off their mortgages for them?

wolfplayer wrote: »

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

You can't know many LLs then!

Index of private housing rental prices Oct 2016

Private rental prices paid by tenants in Great Britain rose by 2.3% in the 12 months to October 2016

Bluebirdman_of_Alcathays wrote: »

why have LLs not put rents up already? It makes no sense. There is a market level for rent.

The cost of renting includes the rent itself plus all the associated fees. If LAs are no longer allowed to charge fees then some of those fees will be passed on to the LL who will pass them on to the tenant. So rents may go up but that doesn't meet the "market level" for the cost of renting has gone up.

Bluebirdman_of_Alcathays wrote: »

I am an accountant - I cannot charge my clients more than they are willing to pay. And that's the end of it.

Huh?!? Presumably, as an accountant, you file Companies House confirmation statements for your clients? So if the government change the way they charge so that the fee increases to £150 will you absorb that cost yourself or increase the charge to your clients?

GreatApe

Letting agents gave the whole rental industry a bad name with silly fees.

The sector will have to contract so those agents that remain can have more properties and charge less per property to landlords/tenants.

Crashy_Time

MobileSaver wrote: »

Ha ha, Crashy you've been wrong for over 10 years waiting for "sentiment" to cause a house price crash!

Why would BTLers sell now when they have people like you who happily choose to pay off their mortgages for them?



You can't know many LLs then!

Index of private housing rental prices Oct 2016



The cost of renting includes the rent itself plus all the associated fees. If LAs are no longer allowed to charge fees then some of those fees will be passed on to the LL who will pass them on to the tenant. So rents may go up but that doesn't meet the "market level" for the cost of renting has gone up.



Huh?!? Presumably, as an accountant, you file Companies House confirmation statements for your clients? So if the government change the way they charge so that the fee increases to £150 will you absorb that cost yourself or increase the charge to your clients?

Even you must see that "sentiment" has finally shifted? Probably should have sold out before now IMO. Most of my landlords didn`t have a mortgage probably, at least not a Super Bubble one, hence the very low rents. Another outcome here will be that if fees are banned tenants will find it much (financially) easier to jump ship when a cheaper rent crops up, meaning landlords will have to be very competitive with their rents and probably have to swallow the costs for checks etc. (The agents fees were never the real cost anyway, which is why there will probably end up being some sort of PPI repeat if this goes ahead)
The Tories want to put downward pressure on rents as they see votes there, but they so far are not ready for full on rent controls? However global events have moved ahead of the UK PTB ability to control now, if USA raises rates we will have to raise and the over-leveraged will get rinsed. Bring it on...:)

GreatApe

LLs won't put up rents nor will they be willing to pay agents more than they currently do

What will happen is the number of letting agents will have to contract from some 70,000 persons towards 30,000 persons. So some 40,000 letting agents will lose their jobs or go out of business. Mostly these will be the very small single person agents running out of a cheap hidden away office or even the spare bedroom. The top 3-4 agents in town will take their business.

With 40,000 fewer agents that's 40,000 fewer wages the industry needs to charge and with 40,000 fewer agents that's a lot of office space shop space and right move accounts that also no longer need to be paid via fees.

Overall a terribly inefficient sector with many many agents will contract into a far more productive industry with fewer players.

Bluebirdman_of_Alcathays

MobileSaver wrote: »

Huh?!? Presumably, as an accountant, you file Companies House confirmation statements for your clients? So if the government change the way they charge so that the fee increases to £150 will you absorb that cost yourself or increase the charge to your clients?

That is a disbursement, not an operating cost, so not in the slightest bit comparable.

MobileSaver

Crashy_Time wrote: »

Even you must see that "sentiment" has finally shifted?

Of course sentiment has shifted, Brexit has seen to that, however I'm afraid your dreams of a 50%+ house price crash as a result are and always will be just that... dreams.

Bluebirdman_of_Alcathays wrote: »

That is a disbursement, not an operating cost, so not in the slightest bit comparable.

Why so shy to admit you would pass on the increased fee to your clients?

always_sunny

GreatApe wrote: »

LLs won't put up rents nor will they be willing to pay agents more than they currently do

What will happen is the number of letting agents will have to contract from some 70,000 persons towards 30,000 persons. So some 40,000 letting agents will lose their jobs or go out of business. Mostly these will be the very small single person agents running out of a cheap hidden away office or even the spare bedroom. The top 3-4 agents in town will take their business.

With 40,000 fewer agents that's 40,000 fewer wages the industry needs to charge and with 40,000 fewer agents that's a lot of office space shop space and right move accounts that also no longer need to be paid via fees.

Overall a terribly inefficient sector with many many agents will contract into a far more productive industry with fewer players.

Possibly it's a good thing; makes you wonder when most high streets are packed with EA back to back. How many are needed?

This is from 2013:

The Office for National Statistics said that 562,000 people are employed in real estate in the UK, the largest number since records began in 1978, with 77,000 joining the industry over the last year – data that added to fears that the country is heading for a house price bubble.

EA are needed but essentially are middle men, they don't really do anything.
They don't do background checks (they outsource it) they don't really amend contracts (they're standard) they are not solicitors (they refer you to), etc.

Office space occupied by EA is like office space occupied by pound shops, not a good sign!
Maybe all these 77k people a year joining this circus could develop skills that are actually needed in the economy!

Bluebirdman_of_Alcathays

http://www.bbc.co.uk/newsbeat/article/38092539/letting-fees-ban-how-it-works-in-Scotland


2% of LLs passed it on in Scotland.....

Bluebirdman_of_Alcathays

MobileSaver wrote: »

Of course sentiment has shifted, Brexit has seen to that, however I'm afraid your dreams of a 50%+ house price crash as a result are and always will be just that... dreams.



Why so shy to admit you would pass on the increased fee to your clients?

Do you know what a disbursement is? Have you ever bought a house?


CH changing their fee structure is in no way related to the fee for my services - the client would have it with any accountant, or even if they did it themselves.


£500 letting agent fees are in no way a disbursement, and in no way would it be payable if the agent were not involved. The two are in no way comparable.

rtho782

So, if a recruitment company finds a potential employee, do they charge them for referencing, time spent on initial screening, etc?

No, they charge the potential employer.

Does this lead to lower wages?

No.

Letting agents provide a service to the Landlord - finding and referencing a tenant. The tenant doesn't give a damn if the LA run a credit check, it's not work on behalf of the tenant, it's work done for the LL's sake.

The LL should pay.

I also refuse to believe that LL's are not already charging as much as they can get away with, so there won't be much scope to bump prices.