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.

I agree LLs should shop around for letting agents who are fair to both them and tenants. Some agents are disgraceful taking fees for the same job on both sides. I would think most LLs would pay agents for the service of calling in bank details, previous tenant history and showing them round, and advising on changes to law/checking there is a guarantor for the rent. But the fees some of them charge tenants and landlords are ludicrous just for the renewal. By the way OP agents only get a percentage of the rent if they manage the property - clearly good if the LL has multiple properties or doesn't live nearby - but again LLs need to check response time/what the agent offers for the 15-20% to make sure their tenants are looked after properly. I hope the proposed changes are well drafted.

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?

Exactly. Think of how your incentives and pricing would change if you could also charge candidates.

I would happily pay an extra 5% per month on top of my rent to avoid the upfront fee of more than £500. In order to pay my fees, rent in advance and deposit I had to get a loan. My agent only signed me up for a six month contract and i will have to pay another £100 to renew it for a further 6 months.
Then i had a problem with my boiler and was told that they may have to charge a call out fee because it was a problem i ought to fix myself.

And I had no choice because there were no other properties available in my price range, in my area that would accept self employed. it was so stressful I just felt i had to pay it.

Whoever said deposit requirements will increase...Damage Deposits are in a ring fenced account and registered with TDS or similar. Agents can't touch them at all. Maybe what you mean is the holding deposit...

Re holding deposits: I've worked in lettings for a few years (admin role) and I've had prospective tenants go out of their way to pull contracts apart and have me spend hours working on it only to pull out of the deal,letting down the client and needing to find another tenant at short notice and lose their holding deposit so the non refundable holding deposit just covers for that really. Most agents would pass it on to the client in that situation. I'm not necessarily for or against the fees. I rented for a few years and didn't like paying them at all just saying from the other perspective there is a reason for it other than lining their pockets, its security for their clients.

I rented for a few years and didn't like paying them at all just saying from the other perspective there is a reason for it other than lining their pockets, its security for their clients.

that doesn't explain the renewal and other such fees.

Chilli - I don't disagree with you at all. Like I said, im not particularly for or against the fees. I was just clarifying the holding deposit situation with most good agents.

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

FGS you have no idea what the reality is for renters do you? Property is scarce and expensive. You pay what they ask or you dibt get the property. There isn't the choice available to allow tenants to shop around. Foxtons is london.

And agents won't simply double the fees they chcarge landlords because landlords won't pay! They will shop around or find alternatives which will force agents to be competitive.

If you'd asked me this 20 years ago, when I was working in a letting agency, I would have said bollocks. We charged 1 week's rent between all the tenants as a fee, and that was it. We didn't charge them to renew the tenancy; in fact we let it roll over unless they wanted to renew, because the flexibility was usually better. There was no charge to the landlord for the letting, unless it was a let-only job, ie we weren't managing it, and we didn't take credit checks so there was no fee for that (showing my age again!). I really don't think that was unfair, and we never had a tenant complain in the several years I worked there.

However, I now know people who have been charged £250 for credit checks as well as letting fees where the landlord has also paid a letting fee, and it can be hundreds of pounds. I think this is very unfair.

Some fees would have been fine, but a lot of agents didn't keep them low or fair, and now they're all paying the price for being greedy.

It is a good idea, but I think rents will rise to cover it...

now they're all paying the price for being greedy.

This.

It's like the deposit-holding schemes. They cost money and admin hassle. But they had to be brought in because enough landlords and agents consistently abused their position .

"you are lucky to be able to afford a second home to rent out"

I do take a bit of exception to this assumption. It's not always true. For example, my dad was made to leave school at 16 because his parents needed him to get a job to help them pay the rent. He'd been desperate to do a-levels and maybe go to university, but was told absolutely no chance, they needed the money. So he went to night school after work 5 nights a week for years to qualify as a banker, and then worked extremely long hours for over 40 years in a bank. He retired from the bank a few years ago, and now he is over 75, and he is still working full time as a financial advisor and company director. He has paid off the mortgage on the family home and owns a second holiday home that he lets out sometimes as an investment. Do you call that "luck"? Because I don't - I call it 60 years of feckin hard work!

I could also tell you about a friend of mine who has a second home to let because she lost her parents in a car crash when she was very young and inherited it. Would you swap your parents for a house? I think it's luckier to have your parents, myself.

So - YANBU mostly, but YABU to assume that every single landlord was born with a silver spoon up his arse :)

actually, on re-reading the OP, you didn't actually make that assumption. Oh well, I've typed it all out now!

It is ridiculous but there needs to be a middle ground between council tenants and fully private

Our local council will rent a house from a private landlord for 5 years. In those years, you get no say over the tenant but a set rent and the house 'made good' when they leave

Your choice is that, or DIY rental via Gumtree, or an agent that charges crazy fees.

At the 'normal' end of the market, I think many if not most landlords would rather have a low-fee non-profit agent, but a) they don't exist, b) buy-to-let mortgages would not accept them and c) I don't even know if they are commercially viable if anything went wrong

Firstly, these "fees" are dubious and a complete rip off. But the landlord is the agent's client, not the tenant, so any fees should be charged to their client (the landlord). The only reason tenants have been putting up with this is because they had no choice, the rental market in the UK is like some sort of mafia assault course. Anyway, well done Hammond!

I have rented in the past, and am now a landlord. It is not a business venture for us, or a second home - our property is merely a way to stay on the property ladder while we are out of the housing market in military housing.
We pay a fee to our letting agent to manage our property. I think it is right that letting agents should be banned from taking fees from both tenant and landlord for essentially the same thing. Charge one or the other! These fees should be capped also, whoever they charge.

"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. "

Provide the tenant puts down a holding deposit which is only taken if he backs out there won't be a problem. The holding deposit could become part of the overall deposit and be put in a deposit protection scheme.

I think that there should be ablity to charge tenants for references if they change their mind and they have passed referencing. If the landlord/agency decides to go through with the contract then the holding deposit should be paid back in full.

I am completely in favour of thes changes. It will make it easier for tenants to move if their landlord does not do repairs. Landlords will think twice about putting up rent as they will have to pay referencing costs for a new tenant.

I'm a landlord and I'm not against this at all.

The fees are way too high and if the agents hadn't been greedy then they wouldn't be in this position.

I go direct now which has a slightly higher risk but also you tend to get a lot more interest.

I'm hoping for some online services that will charge £50 for a credit check, contract and some other bits and I won't pass the cost on.

this is great news, the letting agencies are running a racket, this will seriously hurt them in the pocket area!

Previously they had a very strong incentive to encourage landlords to turnover tenants frequently.
The high cost of agents fee's meant that tenants were who had bad landlords or who were in badly maintained properties couldnt always afford to move.
This puts more power in the hands of tenants.

The agencies could just increase the fee they charge to the LL but many might just think 'sod that' and do the admin themselves?

I’m a renter and this is the reason I point blank refuse to have any dealings with letting agents. All properties I have rented over the last 8 years have been by private agreement with the landlords, who have required nothing more than one month’s rent as a deposit, and a month’s rent upfront.

These “fees” are absolute daylight robbery and it’s disgusting that this has been allowed to go on for so long. Renters, landlords – rent/let your properties privately. Don’t give these parasitic companies any of your money.

This ban on fees has been working in Scotland well and there have been no rent increases.

For those of you who pay to have a tenancy renewal. Why? When we were renting we never did. The tenancy agreement just rolls on without a written agreement.

that's not always possible though BaDumShh - if you are overseas, for example, you need somewhere in the uk where notices can be served and more importantly someone who can pick up urgent repairs. even people in the uk don't always have time to give it the time and attention that it can take. and lots of people would be clueless if the tenant didn't pay rent, and could end up spending a lot on solicitors' fees or losing out, where an experienced agent could do the court stuff for them.

also you can really cock up a tenancy agreement if you're not used to doing it, and you could expose yourself unknowingly to penalty fees re the deposit or corgi checks etc etc etc.

ethical agents who charge a fair amount are what is needed. I loved being a letting agent, it's a great job and it fills a need, and I really do think my agency was ethical (they probably still are, as it's family owned and they are really lovely people). sadly far too many got greedy and abused it.

saranuff - legally you don't need to renew at all. but if the landlord/agent insists that you renew or they'll give you notice to quit, people think they have to do it.

Rents will rise but the overall cost to a renter will be regulated by the market rather than letting agent, of which I've never met a good one once the fees are paid. They're absolute disgraces. Once you've moved in you're at their mercy!