Letting fees to be banned from June - MSE News

Owain_Moneysaver

It looks like some businesses are already planning workarounds:

Direct to Tenant referencing provides a solution in advance of the legislation which will ban letting agents charging fees to tenants. ... we can continue to help you safeguard your landlords by:
Replacing your lost income stream.

If the tenant wants to complete the reference we will help them do so without charge. If the tenant requests that Let Alliance completes the reference in full on their behalf, then we will charge a fee directly to the tenant.

The full referencing process is onerous and our experience shows that the vast majority of tenants prefer to pay our fee and benefit from the Let Alliance service.

I wonder if they may be making it deliberately onerous.

A new tenancy referencing scheme has been launched in Scotland – where it is illegal for letting agents to charge fees – whereby tenants pay, and agents get referral fees.

The scheme, which also produces rent guarantees, has been launched by Let Alliance. The tenant pays £50 and the agent gets a £24 referral fee.

Boss Andy Halstead emphasised that the scheme is not a dodge to get round the ban on fees, but a solution that works within the new system.

However, asked if there was concern that the likes of Shelter might legally challenge the scheme, Halstead – who has taken his own extensive legal advice – did not rule this out.

Agents are finding ways to make more money from landlords as well as tenants:

Letting agents worried about losing income when the tenant fees ban goes live next year may have at least one revenue lifeline open to them, if claims by franchised agency brand Belvoir are to be believed.

The company says it expects half of its 56,000 properties under management to be covered by rent guarantee policies by the end of next year, insurance that it will sell to its landlords in partnership with Let Alliance.

This ambitious sales target follows an announcement over the weekend that it has already achieved 10,000 of this target, or some 17% of its properties.

Belvoir, which signed a partnership with Let Alliance 18 months ago, has been endeavouring to find ways for its franchisees to replace lost income from tenants following the fees ban.

To celebrate the 10,000 property milestone Let Alliance took several of the key Belvoir agents responsible for the rent guarantee sales increase to New York for an all-expenses-paid weekend.

Nice work if you can get it, I suppose.

Crashy_Time

AG47 wrote: »

What will happen if a tenant moves out and leaves the place in a right mess.

Will the agent be able to charge cleaning fees?

They usually say they need to take out some of the deposit because of this or that, but these are fees are they not?

I think this would come under "damages" or "extra cleaning" and won`t be banned. Tenants should leave property in as close to the state they found it as possible IMO.

lookstraightahead

What we also need is a landlord checking service, to check they are paying their mortgage on time, to check if they have CCJs, to get references from previous tenants and to generally hang all their private information out to dry. Also the names and details of everyone who knows anything about them.

Crashy_Time

lookstraightahead wrote: »

What we also need is a landlord checking service, to check they are paying their mortgage on time, to check if they have CCJs, to get references from previous tenants and to generally hang all their private information out to dry. Also the names and details of everyone who knows anything about them.

Slightly extreme, I will look forward to the likes of Belvoir taking a big hit in the future though.

AFF8879

I think it’s a good move. Even if costs are passed on through marginally increased rents, it will help tenants’ cashflow which is often the biggest struggle for many lower income households, and will make it easier for people to move around more freely without being trapped because they can’t afford the agency fees.

mustiuc

We rented our flat last year in Jan thru an awful agent. One of the biggest in the country. Maybe that's why they charge so much, who knows.
We paid £500 agency fee !!!
Aprox. 900 deposit plus 1 month rent in advance. We ended with £2200 paid before we moved in. Also, there was a big lie at the beginning, when I stated my wife is agency worker BUT she is doing 5days a week they said no problem, both of you earn more than we/landord need. After we paid the fee and got the receipt, they gave us the application and said "fill only employment, ignore self employed, 0 hrs contracts,etc we don't allow this kind of applications". We were shocked. I was lucky enought to earn more than it needed to rent it only in my name. How many people were lied to and told them rubbish promises?! We could lose easily 500.
After that they put conditions like professionally clean after tenancy in all the house(including doors/windows/cupboards,frames,oven,etc etc). When we got our initial report it says "kitchen/toilet domestic cleaned", "carpet cleaned professionally" ( no words about windows/washing machine/frames,etc).
After one year they rang me to extend for another 12 months. I refused and said initial 12mts were enough to prove we are good tenants and we want to go ahead as is written in contract, rolling contract. Very pushy, calling all the time and demanding the contract to be signed or landlord will give us notice. I didn't gave a monky on their threats. Finally they approached me "nicely" and said "the landlord" agrees to put another clause of 1 month notice for us and 2 for her. Also they said "this time you don't pay for extension/modify of contract. Aha!, so for next Jan I would not be so lucky.
Just horrible, what can I say more. I feel sorry for the landlord to be between EA and management company/leasehold (we live in a flat). I really feel sorry for her but she choose them/this way of renting.

mustiuc

I forgot to mention this: we wanted to rent a house or bigger flat but with agent fees, deposit, professionally clean, moving, etc we said to don't bother. When we will move from here it will be either we bought our house or landlord evict us. But there will be no way of paying extra rubbish fees to agents

Crashy_Time

mustiuc wrote: »

I forgot to mention this: we wanted to rent a house or bigger flat but with agent fees, deposit, professionally clean, moving, etc we said to don't bother. When we will move from here it will be either we bought our house or landlord evict us. But there will be no way of paying extra rubbish fees to agents

As their fees evaporate they will need house sales to make income, that can only mean one thing.........

falcieri

Well my rent is going up this year, I don't doubt to rake back the fees they can no longer charge me and I imagine this is all that will happen across the board. Agents want their money and how else are they going to make it? That the service I get from a letting agent who charge fees vs a private landlord who doesn't, is pretty shocking ni my experience is ironic to say the least.

MSE_Naomi wrote: »

Landlords and letting agents in England are set to be banned from charging tenants letting fees from 1 June...

Read the full story:
'Letting fees to be banned from June'

Click reply below to discuss. If you haven’t already, join the forum to reply.

Crashy_Time

falcieri wrote: »

Well my rent is going up this year, I don't doubt to rake back the fees they can no longer charge me and I imagine this is all that will happen across the board. Agents want their money and how else are they going to make it? That the service I get from a letting agent who charge fees vs a private landlord who doesn't, is pretty shocking ni my experience is ironic to say the least.

Why not look for a private landlord? We are on the verge of a WTO Brexit, it will be interesting to see how far rent increases actually go.