To think that the ban on letting agents fees are a bloody good thing

[Ohbehave1]

Letting agents get a bite of the cherry from both sides. They get a percentage of the rent AND charge the tenant stupid fees for arranging it all.

It's about time the cost of having a home was made reasonable. I hope this is brought in.

And for those saying it will affect middle class people who have a second home a a nest egg - you are lucky to be able to afford a second home to rent out. So don't complain.

True but they will prob just increase deposit requirements or charge it somewhere else to avoid losing out.

YANBU it's a great thing. I refuse to believe that the current fees are in any way fair, they're just another way for agents to make money. We used to pay £85 each year to renew our lease, which was just us signing a copy of last year's agreement with the date changed!

When we rented in London we would pay over £100 each for referencing fees, in other parts of the country it was more like £50. If there was a flat rate for referencing then I'd be inclined to agree that agents weren't making money from it, just covering their costs, but as it is they can charge literally anything they want, as they know they'll always find someone to pay it.

We paid over £500 in fees for a place about 5 years ago, I'm still angry about it. How on earth are people supposed to afford that, plus deposit and first months rent?!

I doubt rents will rise. LLs will and should shop around.

YANBU!

Letting agent fees are totally ridiculous.

We requested a rolling contract when it came to renewal but were completely stonewalled by the agents. Reluctantly accepted another 12 months, told we wouldn't have to pay entra fees.

Then received an invoice for almost £200 incl VAT as a fee for our new tenancy contract.

I threw it in the bin- they can chase us for it when we move out (hopefully in the not too distant future).

Credit checks are done by an independent company anyway ... You can google them and see how much they charge private landlords directly. Around here it is £40 for the quick reference service and the agents charge tenants £200-300... Then charge a month's rent to the landlords for "finding and vetting" a tenant.

You are lucky to be able to afford a second home to rent out. So don't complain

FFS. No I am not lucky, or only lucky that I am not dying and well enough to work. I am not going to have any pension, I won't have anything to live when I am old. If I am too unwell to work in my 80s, I'll have to pretty much starve. I am not entitled to any help whatsoever nowadays. When I got ill, I was not entitled to any help because I had a mortgage. I didn't owe my home, the bank did. If I had sold it, I would have been in the street, too unwell to work, so unable to find a rental without a job.
I chose to make sacrifice, in the place where I live, to start a pension pot, which happens to be a buy to let kind of thing. I am not lucky. I am asking for your sympathy, but I am fed up with people thinking landlords have an easy life compared to the ones who are entitled to free (or nearly free) houses, with free repair and maintenance and right to buy at heavily discounted price (to sell later at market rate at a huge profit). FFS, who are the lucky ones.

• I am NOT!!! asking for your sympathy.

Mauiwest. Private rent is far from getting free fucking housing. When you pay a stupid amount to rent (£1000+ for a 1 bed flat in Romford or £1200 for a 3 bed in the Home Counties ) it is not free. And you don't even get the benefit of owning the house at the end. It's someone else's nest egg you have paid for.

So yes. If you able to be able to afford a second house as an investment as well
as your own home you are lucky.

When does this change come into force? Does anyone know?
Is it immediately?

We are LL's. Some of these fees are ridiculous. We allow pets in our rentals and wasn't aware that the agent charges tenants an extra fee of £350 pet fee until one of them told us. We soon put a stop to that.

True but they will prob just increase deposit requirements or charge it somewhere else to avoid losing out.

No they won't. The trouble is, and I imagine this happens a lot when this scenario occurs, is that the LL contracts out the service and shops around to minimise his fees (great, the free market is working here. I bet letting agents are competitive when it comes to LL fees), but some of the fees are being paid by another party (the tenant) and the LL isn't sensitive to those fees. Obviously, then, letting agents will charge outrageous fees to the tenant because the tenant is stuck with the letting agent another party (the LL) chose. Apparently, in fact, a lot of LLs don't know the the tenants are even being charged a fee.

Charging tenants would work if somehow the tenant could choose the letting agent for their part of the fees. Then, fees would have to drop because the people paying the fees decide who provides the service.

I have no skin in the game (I live in my own home) but this is great news for renters.

The charges are in place to avoid people applying for dozens of properties at a time, thus wasting lettings agents time - which has to be paid for somehow. Fees are part and parcel of a business transaction which tenants choose to do.

A fee to sign a new lease agreement is just that. The cost is not meant to be comparable to the work required. It's just a fee to help pay for the business overheads.

Having a second or third or whatever property to rent out does not mean that person is 'lucky'. It just means they have made different decisions and sacrifices to others because they know there will be bugger all pensions when they get old.

Nobody is out to get you; the paranoia about lettings agents is really quite odd if you understand the business.

I'm a landlord and I pay fees to find a new tenant and set up the contract. Then it charges the same to the tenant. They take it in from all sides.

So much room. It's odd if you understand business. How condescending.

£50 to £100 just to reprint last years lease and change the dates. Totally unreasonable.

It's great news. We are just renewing and they want £90 for an online form ffs. They just click a couple of buttons. nice work if you can get it lol

but this is great news for renters.

Sorry but I disagree.

They already charge LL and tenants. If they no longer can charge tenants they will charge LL more which one way or another will come back your the tenant.

A fee to sign a new lease agreement is just that. The cost is not meant to be comparable to the work required. It's just a fee to help pay for the business overheads.

why should a tenant care about a businesses overheads? You just nailed the problem, however. The cost is not comparable to the service required, so why should tenants pay for it? They don't want the service, and they don't choose the provider. They are not contracting out the service. The landlord is and should therefore pay for it.

Nobody is out to get you; the paranoia about lettings agents is really quite odd if you understand the business.

I and no one else is supposed to understand the business. That's the role of competition. Very very few people understand the complexities of insurance pricing, and they are not meant to. What is supposed to keep insurers honest is competition.

That's why the current system is broken. There is no competition for the tenant. They are stuck with the EA the LL picked.

They already charge LL and tenants. If they no longer can charge tenants they will charge LL more which one way or another will come back your the tenant.

no it won't because of what I said. If LLs are paying the full fee, they will be sensitive to the entire price. They will shop around and EA will have to compete on those fees. The outrageous prices are only sustainable because tenants can't choose.

The Office of Fair Trading (OFT) took Foxtons to court on this in 2009. It challenged their renewal commission clauses under the Unfair Terms in Consumer Contracts Regulations 1999.

Landlords and tenants need to read their contracts with the letting agents before they sign up. There is lots of room to refuse to pay a renewal charge for the same tenant and/or negotiate a massive discount.

When we rented our house, the agent just sent an invoice for £700 none of it had been discussed at all prior to agreeing the house.

They also wanted £100 reference fee, which was non refundable if we weren't accepted for the house. 4 other families were interested in the house. That's £400 they took off unsuccessful applicants.

When we rented our house, the agent just sent an invoice for £700 none of it had been discussed at all prior to agreeing the house.

Exactly. why wouldn't they? They have a contract with the LL and you the tenant is supposed to pay the fee. Every business in their right mind would charge an outrageous amount in that case.

What if, however, you could say that you'd rather shop around than pay the 700 pounds. you'd immediately see a price drop. or, if the LL paid that fee, you'd be damn sure that it was clear what the fee was for and that the LL knew about it (or should have).

Letting agents charge LLs fees for renewal of contract, finding tenants etc. As well as the tenant. If they cannot charge tenants then all the cost will be passed on to LLs and the charge will in turn be passed on, by way of rent increases, to the tenant.
This is exactly what happened when they put this in place in Scotland where rents increased by about 5% more than the rest of the UK.

I think it's good news. I am a private tenant. We were lucky that the house we currently rent was advertised via a lettings agency that doesn't charge tenants, only landlords. The experience with them was excellent.

We paid a holding fee, which would have been refunded had the landlord not been happy with our credit checks or references. He was, so the agency then transferred the holding fee into the deposit scheme, and we paid the rest of the deposit.

Well, I agree with you OP, and I do have a second home.

This is exactly what happened when they put this in place in Scotland where rents increased by about 5% more than the rest of the UK.

does the study show a causal relationship? Wasn't the study done by or commissioned by letting agents?

We rent and I know all too well what agency fees are like, for both tenant and landlord.
Current property that I am renting, I found my landlord and she had already listed with an agency, they were charging her £500!
Then god knows what they were charging for tenants as well, but they already had 3 people put in an application for the house which were all turned down. So all those people lost their administration fees amongst other fees.
Absolutely sickening.