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.

Tbh I'd rather pay slightly higher rent overall than a £560 fee to move, plus £95 every 12 months and £95 to check out. It's a far more affordable way to pay the costs.
Costs wouldn't increase to landlord in the way you suggest anyway. Currently only landlords are able to be competitive when choosing an agent, because the landlord has the power. Tenants cannot choose - often there is such a scarcity of suitable properties that tenants have to accept the fees or lose the only suitable home.
If agencies have to compete for landlord business and remain competitive they will have to look at their business models to make savings. Letting agents could go online - purple bricks manage to sell houses without offices, agents could use their own vehicles and get paid mileage, there are dozens of ways the industry could change to be less bloated just like every other industry has had to as markets change.
Tenants are not the customer of the letting agents. Landlords are.

"
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."

I don't think you understand how it works - if tenants can't choose and shop around with estate agents, what makes you think the landlords can? Estate agents have all similar fees. Online agents aren't effective and overpriced for basically allowing you to list on rightmove and similar sites. Gumtree and FB attracts people with crap credit who can't pass a credit check without guarantor with an agency and hope a private landlord doesn't know what s/he is doing enough to do a credit check with an independent company.

I am fully behind this. We just paid £360 for referencing for two people. We've been told in the past it's non refundable because once they've paid the referencing company, they can't get the money back. If you check out the referencing company's site, their fees are nowhere near what's being charged though.

And £120 to do a tenancy agreement when you know all they do is change the names and dates, and then print it off a template. It beggars belief.

And let's not forget the inventory check fee :| That can b £100 just for them to walk around a property and tell you what's there. Probably takes an hour max, so you're paying them £100 an hour.

Rant over :D

Hurray hurrah!

Am doing a little dance at this - and I'm not even renting.

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.

That's simply not true - there's no conclusive evidence that rents have risen in Scotland as a result of the ban on fees. The letting agency industry remains in good health and landlord haven't been quitting the market en masse.

Yes, fees will likely be passed on to landlords but it's rubbish to suggest that landlords can't vote with their feet and choose a letting agency that has competitive fees. The letting agency is paid by and contracted to work for the landlord so it is entirely appropriate that they should be the ones paying fees.

The most likely result of banning fees to tenants is that some of the £ that is currently charged to tenants will be absorbed by the letting agents, some will be absorbed by landlords and some might get passed back to tenants by way of rent increases.

Even if some does make it's way back to tenants:

A) it's likely to be far less than current fees
B) it's more manageable to pay monthly as part of your rent than being stung for upfront fees
C) rent is transparent - you know what you are getting into before you sign on the dotted line
D) for people on low incomes rent costs may be picked up by housing benefit (fees can be a significant problem for the poorest people stuck in private renting)

Another thing that is often overlooked is that tenant fees encourage letting agencies to pressure landlords to 'churn' tenants - they'll convince landlords they can charge higher rents to new tenants so the letting agent can cash in on the fees. If the landlord has to pay the fees this reduces the incentive to turnover tenants, which will hopefully mean tenants have. Bit more security.

This is great news.

Bear in mind it's not legislation yet

www.theguardian.com/money/2016/nov/23/rents-unfair-letting-fees-tenants-charges?CMP=Share_iOSApp_Other Rents didn't rise as a result of changes in Scotland. Bear in mind rents go up every damn year by much more than RPI/CPI so a bit of research done by leggings agents doesn't convince me

About time and ive just stopped renting and bought this year. Now bring in a rent cap and increase tax on empty second homes.

They'll pass them onto landlords
Who will pass them onto renters

They won't just pass them on to landlords
Read the thread eh

I haven't rented in about 7 years. But when I did I didn't pay any fees. And rolling contracts were normal. This in 2 areas of the country. It worked then, what has changed in the past 7 years to make it necessary except there's more competition for houses so renters have less choice so they can get away with it. I'm glad it's happening, even if it doesn't directly affect me.

I think it's a good idea and I'm a landlord. In fact, I thought it was the arrangement I had with my last letting agent - a year into the contract I found out they weren't just charging me for things like reference checks, they were charging my tenants too. My letting agent now is much better.

Yes yes, bubbins, it isn't just about the total amount handed over by tenant, it's about the behaviours tenant-charging has encouraged.

And indeed discouraged - high upfront fees have restricted tenant's ability to "take part in the free market", by making the cost of moving to a new provider ridiculously high.

The fees are complete bollocks and the OP is completely right. Renters can't shop around in the same way a landlord can and yes, some of it will be passed on in rent, but that STILL helps the poor sod who is struggling to scrape together a 6 week deposit as well as a months' rent in advance.

Don't even get me started on the ludicrous cost of renting in the UK.

Indeed. When moving can be forced on you once a year and can eat up £1000 each time, that's £10000 over 10 years which is a good chunk of a house deposit.

They won't just pass them on to landlords

In your opinion.....

I think a cap on the fees that can be charged to both tenants and landlords would be the best solution. When my bf rented his new place recently, he paid £500 for referencing (none of the people were contacted) and basically for them to take copies of his bank statements and other docs. Oh and send him a poorly put together pro forma tenancy agreement which was littered with errors. He had to ask for an inventory. The agents also charged the landlord nearly double that amount for 'finding and vetting' services!

It's as bad at the other end too...when he moved out of his last place (on a Sat) the letting agents said they'd do the inventory on Monday, and advise him if there was any problems. That was over 2 months ago, despite leaving various messages they've still not called him back or returned the deposit!

What do letting agents get paid for exactly?!

And indeed discouraged - high upfront fees have restricted tenant's ability to "take part in the free market", by making the cost of moving to a new provider ridiculously high.*

Good point.

They will just pass them on to tenants, so it wont change anything. Smoke and mirrors.

They find other things to charge tenants for. My brother and his flat mate were shafted in edinburgh for what were essentially admin fees and they couldn't get them back as they didn't technically fit the bill of admin.

I think properly policed it's a good thing. Tenants need homes - landlords run a business. In my wee utopia homes trump business.

They won't just pass them on to landlords

yes, they will, and some of the will be passed onto the tenants.

What you won't have, however, at least as much, is fees that don't match the service provided. You can't charge 500 pounds now to sign a contract because the LL will just go to a cheaper provider.

if tenants can't choose and shop around with estate agents, what makes you think the landlords can?

LL can choose from the whole market. Then the tenant is stuck with that choice.

Surely tenants can shop around by asking to know fees upfront and only going on the viewing if they're happy. Plenty of people avoid Foxtons this way. If enough people did it to effect viewings then agencies would have to lower them to get a tenant.

But I'm in favour, as long as agents can take a deposit of some kind to be sure the applicant is serious, maybe a weeks rent that is put towards the deposit once contracts are signed. FwIW when I was an agent we returned all feed f tenant was declined

I'm a headhunter and we don't charge candidates for our service, we charge the clients. Not sure why it's different for estate agents?

There's one house to rent within my area right now (no idea if it would be within budget, number of rooms etc) So I'd have the choice of being shafted by that estate agents fees or moving my children's school.

Tenants don't have a freedom to chose agents