Lettings agent fees will be banned.

Banned 47 replies
Found 23rd Nov 2016
The government has announced plans to scrap all letting fees charged to tenants ‘as soon as possible.’

That means when you move, all you can be asked to pay is your first month’s rent and a deposit. No more charges for credit checks, inventories or admin fees. Those will now have to be paid by the landlord.

independent.co.uk/new…tml

I'm guessing rent will just increase as a result?

47 Comments

that's why they should have brought in rent controls.

Anyone know if this effects Wales, on the BBC today they said it was for England as it was already in place for Scotland.

My Daughter was being thrown some very silly up front fees, it was £400 just to be told no, it made her options very limited, so while it may increase rents, it will open up a lot of options for people, it was just a way of letting agents still say no DSS.

Good, maybe Countrywide Estates will stop exploiting people now by charging £150 just to change a date on a tenancy agreement but conveniently forget to tell the landlord there was a mould and damp problem. I hated renting, so hard to find decent landlords and lettings agents.

Banned

haritori

My Daughter was being thrown some very silly up front fees, it was £400 … My Daughter was being thrown some very silly up front fees, it was £400 just to be told no.



And that is why the law is changing.

Normally Englands law is the same as the Welsh

momartin

Good, maybe Countrywide Estates will stop exploiting people now by … Good, maybe Countrywide Estates will stop exploiting people now by charging £150 just to change a date on a tenancy agreement but conveniently forget to tell the landlord there was a mould and damp problem. I hated renting, so hard to find decent landlords and lettings agents.



​just been looking on 'shelter wales' website, after reading haritoris post, can't believe they can charge you every time they renew your tenancy.

Original Poster Banned

haritori

Anyone know if this effects Wales, on the BBC today they said it was for … Anyone know if this effects Wales, on the BBC today they said it was for England as it was already in place for Scotland.My Daughter was being thrown some very silly up front fees, it was £400 just to be told no, it made her options very limited, so while it may increase rents, it will open up a lot of options for people, it was just a way of letting agents still say no DSS.



That is shocking. £400? criminals.

Majority of letting agencies are scammers, they charge £100+ per application and yet they'll still turn you down, they do it to multiple people raking in big money.

I'm moving out of a private rental on December 20th. I have to pay a £70 "checking out" fee. Think I can get out of paying it now? X)

Wish this change had come in earlier, I've just paid £240 for a credit check.

Edited by: "surfbabe10" 24th Nov 2016

shadey12

​just been looking on 'shelter wales' website, after reading haritoris p … ​just been looking on 'shelter wales' website, after reading haritoris post, can't believe they can charge you every time they renew your tenancy.



​They would never give us a tenancy agreement for more than 12 months either despite the landlord advertising it as a long term let. Scum bags. Best thing I ever did was buy a house but I know that I'm lucky and most people are trapped in tenancy.

Always been a con, a duplicate charge to the one made to Landlords. If the letting agents pass on the costs to landlords then rents will go up though.

shadey12

that's why they should have brought in rent controls.


Rent controls don't work, often below market level lead to a smaller rental market and even more competition for properties if that was even possible in South East.

davewave

Rent controls don't work, often below market level lead to a smaller … Rent controls don't work, often below market level lead to a smaller rental market and even more competition for properties if that was even possible in South East.


Not neccessarily. Your assertion is based on the premise that the rental market is perfectly competitive, and thus that the profit (or in this case, economic rent) is precisely equal to the opportunity cost of not placing that same capital in some other market. In that case, a below market rate level rent cap would likely result in some landlords exiting the market. However, since you have not established that your assumption is valid, it is perfectly possible that your conclusion is incorrect.

gnu_guy

Not neccessarily. Your assertion is based on the premise that the rental … Not neccessarily. Your assertion is based on the premise that the rental market is perfectly competitive, and thus that the profit (or in this case, economic rent) is precisely equal to the opportunity cost of not placing that same capital in some other market. In that case, a below market rate level rent cap would likely result in some landlords exiting the market. However, since you have not established that your assumption is valid, it is perfectly possible that your conclusion is incorrect.



​you seem familiar. Lots of waffle but in brief you want proof...as an example look at NY property market where rent controls exists and fails.

davewave

​you seem familiar. Lots of waffle but in brief you want proof...as an e … ​you seem familiar. Lots of waffle but in brief you want proof...as an example look at NY property market where rent controls exists and fails.


The New York property market is not the market of the South East of England. The mere fact that there is such scarcity of supply implies that returns will likely be higher than the opportunity cost, since the bargaining power is firmly in the landlord's favour. Excessive returns would normally encourage an increase in supply, but this mechanism doesn't work so well in property markets, due to the fixed supply of land.

gnu_guy

The New York property market is not the market of the South East of … The New York property market is not the market of the South East of England. The mere fact that there is such scarcity of supply implies that returns will likely be higher than the opportunity cost, since the bargaining power is firmly in the landlord's favour. Excessive returns would normally encourage an increase in supply, but this mechanism doesn't work so well in property markets, due to the fixed supply of land.



​New York market is the closest comparison. London and South East also have a lack of available land near the CBD.

davewave

​New York market is the closest comparison. London and South East also h … ​New York market is the closest comparison. London and South East also have a lack of available land near the CBD.



I know there is a lack of land. That is precisely my point. Lack of land -> excessive returns -> possible scope for intervention. If I currently get a return of 20 GBP per week as a landlord, and normal profit elsewhere is 10 GBP, a rent cap that reduced the return to 15 GBP would not result in me exiting the market, since I still make 5 GBP more than I would elsewhere.

Is lettingsagentfees another multi?

gnu_guy

I know there is a lack of land. That is precisely my point. Lack of land … I know there is a lack of land. That is precisely my point. Lack of land -> excessive returns -> possible scope for intervention. If I currently get a return of 20 GBP per week as a landlord, and normal profit elsewhere is 10 GBP, a rent cap that reduced the return to 15 GBP would not result in me exiting the market, since I still make 5 GBP more than I would elsewhere.



​buy to let is an investment, when yield drops and costs remain static then time to move to another market or sell to someone who doesn't want to rent, owner occupier or simply vacant owner...less liquidity in rentals will lead to lower rental supply.

Predikuesi

Is lettingsagentfees another multi?



​do you want to know nah you dont want to know

Edited by: "davewave" 24th Nov 2016

Rents will have to go up then if the agents pass on their fees to the landlord.

A thoroughly inept attempt to get a headline but this won't help renters in the slightest.

Clearly the government is on the side of those in the buy-to-let market. Same old Tories, gotta love'em.

dunno

I'm moving out of a private rental on December 20th. I have to pay a £70 … I'm moving out of a private rental on December 20th. I have to pay a £70 "checking out" fee. Think I can get out of paying it now? X)


Dunno

123thisisme

Dunno


Not yet known...

Mr Hammond said he would take aim at the charges letting agents can levy on tenants for services such as administration and referencing. The government believes the ban — to be brought in “as soon as possible” following a consultation — will help millions of households in private rented housing by sparing them what can amount to hundreds of pounds in fees.

“We have seen these fees spiral, often to hundreds of pounds,” Mr Hammond said. “This is wrong. Landlords appoint letting agents and landlords should meet their fees.”

The move came despite a warning from the housing minister in September that “landlords would pass costs to tenants via rent” if the fees were banned. Labelling this a “bad idea”, Gavin Barwell said on Twitter at the time that “we’re looking at other ways to cut upfront costs & raise standards”.

On Wednesday the minister said: “It is the nature of the job that you have to defend current policy, even when you’re working to change it.”

Looks like I may have to put my rents up soon then, not happy to do it

Unfortunately due to a series of job changes and location moves, I have moved house seven times in the last five years. Even with being in the north east I have still spent over two thousand pounds in non refundable fees and admin checks etc in that time. Some admittedly that work reimbursed me for luckily. I have been lucky so far that I haven't been turned down for spurious reasons so I actually do get the house I wish but not everyone is like that and some estate agents take advantage and turn that into their business model. Ruined by the few for the majority no doubt but it does need regulating, the argument now is whether a blanket ban like scotland works or whether we should set national caps etc, or even have this tenancy passport scheme which would allow vetting to be done once and move with you so only one cost.

joey1352

Unfortunately due to a series of job changes and location moves, I have … Unfortunately due to a series of job changes and location moves, I have moved house seven times in the last five years. Even with being in the north east I have still spent over two thousand pounds in non refundable fees and admin checks etc in that time. Some admittedly that work reimbursed me for luckily. I have been lucky so far that I haven't been turned down for spurious reasons so I actually do get the house I wish but not everyone is like that and some estate agents take advantage and turn that into their business model. Ruined by the few for the majority no doubt but it does need regulating, the argument now is whether a blanket ban like scotland works or whether we should set national caps etc, or even have this tenancy passport scheme which would allow vetting to be done once and move with you so only one cost.


I would want to do checks on a new tenant irrespective of previous outdated clean sheets.

MrScotchBonnet

That is shocking. £400? criminals.



Yeah safe to say we didnt bother to use them, but thats not the most expensive..

Before we decided to buy we rented when we first moved to wales.. this was about 7 years ago now..

there was no admin fees, just deposit and months rent in advance, but in that 7 years, we moved once and all of a sudden we had to pay Admin Fee of £120.00 and a £90 credit check fee..

told them id send them my credit report for £2.00 lol.

davewave

I would want to do checks on a new tenant irrespective of previous … I would want to do checks on a new tenant irrespective of previous outdated clean sheets.



Two points I suppose though I do agree you have made a reasonable point, if I was a landlord I would want an uodated check though wouldn't be something that would hold a lot of weight with me, outside checking the very basics such as ccjs or bank accounts.

One where else would you expect the consumer to directly pick up the cost of credit checks as opposed to include the work within overheads. Very for example it is exceptionally easy to open a checking account.

The second being that this situation has come around becauee of ludicrous prices where a natural monopoly has been created. Landlord picks a letting agent who charges landlord and tenant fees which dont have any basis whatsoever in reality. The tenant is forced to deal with the landlords agent come what may and pay whatever is demanded. When mps start to hear that rogues are charging ten tenants 300 quid a pop for the same property and turning them all down for spurious reasons then you end with the natural reaction to regulate or ban the practise.

The estate agents for whatever reason have resisted calls to come up with a true national best practise guide for this area and as such now the consequence is extreme.

joey1352

Two points I suppose though I do agree you have made a reasonable point, … Two points I suppose though I do agree you have made a reasonable point, if I was a landlord I would want an uodated check though wouldn't be something that would hold a lot of weight with me, outside checking the very basics such as ccjs or bank accounts.One where else would you expect the consumer to directly pick up the cost of credit checks as opposed to include the work within overheads. Very for example it is exceptionally easy to open a checking account. The second being that this situation has come around becauee of ludicrous prices where a natural monopoly has been created. Landlord picks a letting agent who charges landlord and tenant fees which dont have any basis whatsoever in reality. The tenant is forced to deal with the landlords agent come what may and pay whatever is demanded. When mps start to hear that rogues are charging ten tenants 300 quid a pop for the same property and turning them all down for spurious reasons then you end with the natural reaction to regulate or ban the practise.The estate agents for whatever reason have resisted calls to come up with a true national best practise guide for this area and as such now the consequence is extreme.


yep agreed...as I said in post number 11

Always been a con, a duplicate charge to the one made to Landlords. If the letting agents pass on the costs to landlords then rents will go up though.

Just increase the rent then - job done...

good, they work for the landlord, the landlord should pay all fees relating to renting their property.

Christ knows how they got away with doing this for so long, £300 - £400 for a bit of paperwork and a £20 credit check, they were taking the pee.

davewave

​buy to let is an investment, when yield drops and costs remain static t … ​buy to let is an investment, when yield drops and costs remain static then time to move to another market or sell to someone who doesn't want to rent, owner occupier or simply vacant owner...less liquidity in rentals will lead to lower rental supply.


Landlords will only sell if the yield falls below the opportunity cost. That is the point that you keep missing. If yields are excessive due to market failure (as they are in this case), it is perfectly possible to introduce price controls whilst leaving yields above the opportunity cost. Your argument is similar to that of the Conservative Party with respect to the introduction of the minimum wage. They claimed that it would result in the loss of 1 million jobs, but it didn't, because the market equilibrium wage level for low-pay jobs was significantly lower than the maximum than employers were willing to pay when purchasing the given quantity of labour.

In short, many markets do not function in the way that you are assuming.

HotEnglishAndWelshDeals

A thoroughly inept attempt to get a headline but this won't help renters … A thoroughly inept attempt to get a headline but this won't help renters in the slightest. Clearly the government is on the side of those in the buy-to-let market. Same old Tories, gotta love'em.


I think you are jumping the gun, here. Consider the differences in the business relationship between letting agent and tenant, and that between letting agent and landlord. In the former case, it is the letting agent that has all the bargaining power, so they can charge whatever fees they like. In the latter case, the bargaining power rests with the landlord, so the letting agents will be forced to compete by reducing their fees. Landlords are not going to be paying 400 GBP for a credit check. So, even if the fees are passed on in the form of higher rents, the tenant still gains. The changes will also remove the incentive to charge fees rip-off fees and reject people for spurious reasons, since it will only be possible for the landlord to recover the costs once a tenant moves in.

Unusually for the Conservative Party, this is actually a reasonably smart economic decision, though of course they did not come up with it themselves.

This wont help those looking to rent as the agent will pass the costs on to the landlord, who in turn will increase the rent. It's a recycling of costs only.

I guess it's a bit like the items listed on eBay . Some have free delivery at say £9.99 and others have £5 with £4.99 postage

How would this affect me? I really haven't got a clue about rental fees, we moved in here over 6 years ago on a joint tenancy, I paid the deposit but I cant for the life of me remember if I just gave my man the money or if my account details were given and then the DD for his account for the rent thereafter.

All I know is right now half the rent is paid by housing benefit, the love of my life has lost his marbles and is leaving us to fend for ourselves having recklessly got himself a studio flat he can barely afford, he didnt give the landlord notice, he just phoned them and said he was leaving in a couple of weeks they were surprised obviously and just said that I would have to go in to discuss a new tenancy and there would probably be fees involved.

I will have to have full housing benefit to pay the rent, I can't find out what my LHA is until I get job seekers allowance so they can calculate it, I can't claim job seekers allowance until the love of my life leaves, so I am stuck in limbo worried the landlord will evict us how will we get by as a single mum etc, don't tell me they are going to want lettings fees aswell even though I've lived here for years and am on the tenancy

davewave

​buy to let is an investment, when yield drops and costs remain static t … ​buy to let is an investment, when yield drops and costs remain static then time to move to another market or sell to someone who doesn't want to rent, owner occupier or simply vacant owner...less liquidity in rentals will lead to lower rental supply.



Slight flaw in your reasoning: "sell to someone who doesn't want to rent ... less liquidity in rentals will lead to lower rental supply". But this lower rental supply will be offset by lower rental demand from the person(s) who bought the property.

gnu_guy

I think you are jumping the gun, here. Consider the differences in the … I think you are jumping the gun, here. Consider the differences in the business relationship between letting agent and tenant, and that between letting agent and landlord. In the former case, it is the letting agent that has all the bargaining power, so they can charge whatever fees they like. In the latter case, the bargaining power rests with the landlord, so the letting agents will be forced to compete by reducing their fees. Landlords are not going to be paying 400 GBP for a credit check. So, even if the fees are passed on in the form of higher rents, the tenant still gains. The changes will also remove the incentive to charge fees rip-off fees and reject people for spurious reasons, since it will only be possible for the landlord to recover the costs once a tenant moves in.Unusually for the Conservative Party, this is actually a reasonably smart economic decision, though of course they did not come up with it themselves.



Well put.

3guesses

Slight flaw in your reasoning: "sell to someone who doesn't want to rent … Slight flaw in your reasoning: "sell to someone who doesn't want to rent ... less liquidity in rentals will lead to lower rental supply". But this lower rental supply will be offset by lower rental demand from the person(s) who bought the property.



​the population is growing not static.
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