MSE News: Letting fees ban introduced to Parliament

Former_MSE_Megan_F

New rules to ban letting fees and high deposits in England have been presented to Parliament...

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'Letting fees ban introduced to Parliament'

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boatman

The cheekiest fee is charging the tenant and landlord to renew the contract after 6 months, the tenants are often told the landlord is 'insisting' its renewed when in many cases I doubt the landlord knows anything about it until they are also charged themselves for it. I'm sure in most cases tenants and landlords are happy to let it continue on a rolling contract, but of course the agent makes no money from that.

PasturesNew

It is outrageous. About 20 years ago I am not aware of any fees. Also, notice periods were "1 month from when you give notice", so it was easier/quicker to move out if your circumstances changed.

There were no moving in check fees, nor moving out checking fees.

People struggling can easily end up "trapped" in something they know they can't afford, but can't give notice on .... and don't have £2-5k for fees/deposits/checks etc on a smaller place or one where a new job's been offered.

Years ago there'd be an advert of "flat to rent", you'd see it and agree to take it ... and maybe be moved in within a few days/the week. To leave you just gave a month's notice from any date. Much cleaner/simpler.

Crashy_Time

Does the shift in the voting block towards renters mean this will pass just to be seen as "doing something"?

HornetSaver

Crashy_Time wrote: »

the shift in the voting block towards renters

What a fantastic euphemism for the state of the housing market.

I don't oppose any of these measures, but with a couple of them I see great risks if not implemented intelligently.

The bias is currently too far in favour of the landlord right now, and it's right that this is changing. But the one thing landlords need to know is that if they are acting within the rules and their tenants are not, these regulations do not make things more time consuming or costly for them to rectify the problem.

If they can't be sure of that, then rents will increase, because all landlords will be in the same boat. Conversely, if they can be sure of that, then this would be a benefit for the "good" landlords and agents relative to the "bad" ones, in the sense that a clampdown on unscrupulous use of fees and other charges will hurt people who are behaving most reasonably the least.

buggy_boy

I can see a few problems or unforeseen consequences... Although I totally agree tenant fees are outrageous I think a max fee for new tenancy and renewal that would just reflect the costs, would be better and this is why...

- To stop tenants just applying for multiple properties letting agents have planned to take a deposit, this will not be protected in a scheme and I can see all the problems we had before when it comes to deposits.

- Landlords will be less flexible, letting agents will still charge for renewals but landlords will pick up the bill, expect landlords to reject the tenant only wanting a 6 month renewal

- I recently had a situation when couple renting, they split up, she stayed in property, council wanted tenancy in just her name, to do this obviously there was a fee from letting agent (Needed letting agent because of all the new legislation), tenant paid this fee, if they could not have paid it will cause issues, there was no benefit for me to change the tenancy agreement, it was the council that needed it.

- Limiting deposits will mean it will be more difficult for tenants with bad credit history or those with pets getting a tenancy as landlords cannot get extra deposit to cover the extra risk.

I think this is all about wanting to be seen to be doing something and not really thinking it through and just like the windrush migrants that fell foul or right to rent this will unintentionally hit those that are most vulnerable the hardest.

thelem

buggy_boy wrote: »

Landlords will be less flexible, letting agents will still charge for renewals but landlords will pick up the bill, expect landlords to reject the tenant only wanting a 6 month renewal

As a landlord, you choose the letting agent, so they need to be competitive on fees and service. As a tenant, you choose the property and get whatever letting agent comes with it. Landlords don't necessarily even realise that the fees are being charged to the tenant.

buggy_boy

thelem wrote: »

As a landlord, you choose the letting agent, so they need to be competitive on fees and service. As a tenant, you choose the property and get whatever letting agent comes with it. Landlords don't necessarily even realise that the fees are being charged to the tenant.

I agree however as a landlord we will also try to mitigate these costs, it may work out for the better for some tenants, I manage my own properties, as such I let them role into periodic tenancy agreements and some have been going like that for years, this suits some tenants rather than paying for a new tenancy every 6 months but for others they prefer the security of having a longer tenancy...

The problem I see is the agent is still working for the landlord yet the deposit for holding the property will be between tenant and agent, if something happens that results in the tenancy not taking place agents are going to be very reluctant to give back the deposit, in fact I can see scams coming about by rogue agents blaming tenants for not taking a property and keeping the deposit even when it was not the tenants fault.

PasturesNew

The way it used to work for agents' income was that they had enough of a portfolio of properties to generate their income by charging the "10% of the rent" fee from the landlord.

These days, "everybody" became an agent and they have few properties on their books.

In the olden days you'd go to an agent, who had a lot of property on their books and they'd know what was going on with them all and which might be of interest to you ....

Nowadays 1001 agents each have 1-2 properties they're advertising and it's a pain in the butt calling round lots of different agents to try to get viewings for the one they've got.

If average rent is, say, £1000/month and if an agent takes £100 from that, then they could run their business with that passive income if they had 100 properties (100x£100 = £10,000/month). That's £10k/month for sitting on their bum tickling their admin along. They don't NEED to charge additional fees "to cover their costs" if they're running a viable business.

They all got ridiculously greedy - and once they spotted another agent had invented some "new fangled fees to rip cash from the pockets of tenants", they all added that one to their list.

Tenants used to just go to a viewing, pick a flat, sign the paperwork, hand over their deposit and first month's rent and move in.

Crashy_Time

buggy_boy wrote: »

I can see a few problems or unforeseen consequences... Although I totally agree tenant fees are outrageous I think a max fee for new tenancy and renewal that would just reflect the costs, would be better and this is why...

- To stop tenants just applying for multiple properties letting agents have planned to take a deposit, this will not be protected in a scheme and I can see all the problems we had before when it comes to deposits.

- Landlords will be less flexible, letting agents will still charge for renewals but landlords will pick up the bill, expect landlords to reject the tenant only wanting a 6 month renewal

- I recently had a situation when couple renting, they split up, she stayed in property, council wanted tenancy in just her name, to do this obviously there was a fee from letting agent (Needed letting agent because of all the new legislation), tenant paid this fee, if they could not have paid it will cause issues, there was no benefit for me to change the tenancy agreement, it was the council that needed it.

- Limiting deposits will mean it will be more difficult for tenants with bad credit history or those with pets getting a tenancy as landlords cannot get extra deposit to cover the extra risk.

I think this is all about wanting to be seen to be doing something and not really thinking it through and just like the windrush migrants that fell foul or right to rent this will unintentionally hit those that are most vulnerable the hardest.

Tenants should be able to apply for as many properties as they like, they are only legally bound once the paperwork is signed and their deposit is taken. If this goes through then agents will need to put pressure on people selling property to drop prices so that the agent can get a fee, which should be quite amusing to watch.....:)

Footos

Hi,
Our tenancy renewal is coming up in the next month. Does anyone know if the provisions of the new Bill will apply to existing tenancies?


I'm particularly worried about an additional clause where "Any further extensions or renewals at a later date will also be charged at £XXX".


Thanks