Labour is to try to force a vote in the Commons next Tuesday on banning fees charged by letting agents to tenants.
The ban could be in place within months. Industry leaders have hit out at the proposals, pointing out that bans on fees are likely to result in raised fees for landlords – who would pass the increases on to tenants in the form of higher rents.
Ian Potter, managing director of ARLA, called the latest move – unveiled today – deeply worrying.
Ed Miliband believes he could get support from both the Tories and Lib Dems, and that legislation to ban fees could be in place before next year’s General Election.
David Cameron has been pointedly silent on the specific matter of letting agents’ fees, although his party has repeatedly said it will not legislate the lettings industry itself.
On Wednesday, during Prime Minister’s Questions, Cameron rejected another Labour idea – that of rent controls – but did suggest he would be prepared to work with Labour on proposals for longer tenancies.
Miliband will table the proposed ban as an amendment to the Consumer Rights Bill in the Commons.
Miliband said: “If the Conservatives and Liberal Democrats support us on Tuesday we can make this happen now. That could be implemented straight away.
“David Cameron seemed to be warming to Labour’s policy on rents. Now he has a chance to actually vote for it.”
Shadow housing minister Emma Reynolds said: “If the Tories and Liberal Demcrats refuse to back Labour’s proposals, they’ll have to explain why they won’t stand up for the nine million people who rent.”
Potter said: “Pledging to transfer fees to landlords or calling for outright bans will increase rents as landlords and agents seek to achieve returns. Fees are not arbitrary or unnecessary; they represent a business cost that Labour has failed to recognise.”
Under the likely proposed amendment, letting agents could only require tenants to pay a month’s rent upfront and a deposit. They would not be able to charge for services such as administration, referencing or check-in inventories.
Following next Tuesday’s vote, the Consumer Rights Bill would then have a third reading in the Commons, before going to the Lords for consideration.
There has been no way near enough debate on this issue since it was first mentioned by Labour within the last week. Clear assessment of the policy will establish that it is flawed.
My concern now is that the tories and Lib dems, fearing that should they vote against it will be deemed as not acting on the side of renters, will push it through!
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Normally I would be a supporter for Labour policies. Following this announcement, I can only say, they are loosing the plot.
No other aspect of the property market does not have a system of payment or redress for failure to commit. If this proposal is adopted, it leaves the way open for prospective tenants to mess landlords around even more than they currently do resulting in longer void periods. Not to mention increased costs for landlords in respect of council tax payments, now that the majority of authorities have withdrawn the period of exemption between tenancies.
If applicants are not expected to pay an administration fee, they are more likely to pull out of properties that have been withdrawn from the market on their behalf. As a result of which the landlord stands to lose out on other potential applicants in the interim, whilst references are sorted out. Even at the moment applicants who pay an administration fee hedge their bets and pull out at the last moment and marketing the property has to start all over again.
If you were to put an offer on a property for sale, you stand the chance of being penalised by non refundable costs to solicitors, valuers and other parties. If you a a social tenant and you withdraw from a property that has been allocated/awarded to you, you will be removed from the waiting list and be unable to bid for other properties for a period of time. Why then should the private sector be different?
Get real and re-think this proposal. Yes some agents do charge excessive fees and this may need visiting but a blanket ban is the totally wrong approach
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The 9 million people who want to rent? where does that figure come from? Shelter?
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It is important to retain some cost for the tenant when applying to rent a property, otherwise anyone could apply even if they know the rental cost is out of reach thus incurring a cost to the landlord, which is an additional abortive cost for the market to bear. What would there be to prevent a tenant from applying free to rent ten houses and only taking one? Imagine the confusion this could cause.
Any interference with rents or terms of tenancies could reduce the supply of property in the private rental market. Anyone who recalls the abolition of Regulated Tenancies and the subsequent growth in the supply of homes to rent will agree that meddling with a free market can have disastrous consequences. Look how the Help to Buy Scheme has fueled price rises, and what will happen to prices when it is withdrawn?
I would urge all MPs to research these issues thoroughly to protect the nine million people in rented accommodation from a reduced supply of homes to rent and resulting rent increases. If it becomes less favourable for landlords to invest in residential property they will move out or put up rents to compensate for the tenant's costs being passed on to them, which might result in a higher monthly cost and an overall loss for the tenant.
MPs, please don't do anything in haste for popularity in the opinion polls, remember the mess caused by the Home Information Packs, which sounded a lovely idea and the naive were in favour of what they imagined was a simple way to 'fix' the property market, even though the property professionals all warned against them. Don't make the same mistake twice. Look at the history of the rented sector and Regulated Tenancies before messing this market up.
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I think Labour need to look at the bigger picture…!!.Rents will go up and then you will have a problem with affordability in salaries to rental payments. If they are going to do anything they should limit the amount of fee that can be charged not simply that tenants cannot be charged….there can be a big difference in fees with different agents…..
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To be honest, doesn't bother me. Bring it on. Will hurt the big boys far more than me. We currently charge £125 first tenant, capped at £250 for up to four tenants.
By the time we've deducted VAT and actual costs, doesn't leave a great deal anyway. Have never charged a tenant for renewal, provision of a reference or check-in/check-out, nor taken a holding deposit.
We've been long educating landlords a tenancy is a business – their business – and that they should bear such costs directly. Another £50 for referencing isn't going to hurt. It's all tax deductable!
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We've made it free for tenants to apply since last June.
Rents have not gone up.
What we've had is more enquiries – so houses let faster and our landlords have a bigger pool to choose from.
It's already in Scotland and the world did not end there.
So, I'd say stop complaining. It's going to happen, so start planning for it.
EweMove.com
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To all those bemoaning tenants messing us all about. Legislation need only allow a set holding deposit be taken, refunded on move-in (deducted from fees), if the deal goes ahead. And if it doesn't, it's paid in full to the landlord, less actual reference costs incurred by the agent.
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I agree that fees should be regulated, but to ban them altogether is just going to cause issues with higher rents, increased fees for landlords etc. We already make fees clear to tenants, no hidden fees, it's all clear for them to see from advertisement stage onwards. I know some lettings agents take advantage and charge separately for guarantor forms, new tenancies etc. which I think is unreasonable – but a simple one off fee is surely to be expected for the referencing process?!
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So as a small lettings business, we are to adhere to EPC legislations, Data protection, Money Laundering rulings, protect deposit etc etc etc but we are to provide this service and administration for nothing using paper that we PURCHASE and staff that we EMPLOY and PAY WAGES to etc. Why is everything within our industry so ill thought out???? Why do these MPs not see that there is always a knock on effect of their pipe dreams that they THINK will have an effect. One minute you want to increase the private rental market so save public monies but then you burst the balloon on the property market – bizarre, ill thought out and ridiculous process.
I agree with a limited fee – some agents are more than double what we charge which is unfair on tenants, but lets not get carried away and put another nail into the small business market – I thought you wanted the economy to recover!!!
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If we stop charging application fees, landlords will have to pick up the costs (which will result in rents being increased) so the tenants will end up spreading the cost over all of the months that they rent rather than a comparatively low admin fee at the commencement of the tenancy.
The fees should be capped so they are not astronomical, I do agree with that, having ridiculous fees jus counter productive for letting the property generally.
When Mr Miliband says comparatively the buyer doesn't pay any fees, they do… Solicitors to draw up the paperwork, mortgage arrangement fees to provide the mortgage and stamp duty. Comparatively the letting agent pays for regular updates to the ever changing letting industry tenancy agreements so both landlord and tenant are secure, this is the same as the job done by the solicitor in buying. Mortgage arrangement fees are the same as charging for references. Stamp duty…. Well… That's just something the government charge to profit from people moving into a house…. Yet they see an admin fee of a couple of hundred pounds is seen as unreasonable… Need I say more?!?!?
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Sadly due to certain greedy London letting agents who only offer tenants 6 month tenancies and then charge £500 per renewal we now have Labour interfering in our industry. Unfortunately Labour seem unable to keep from interfering with free commerce and allow the rental market to find its level. Tenants who have been over charged during the 'boom' time will not forget and when things change the rip off agents will fail, this is always the way in any free capitalist country.
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Whilst the timing is unfortunate, some form of change was inevitable as a result of "generation rent".
Political brinkmanship in the run up to an election is of course the main point on the agenda here but this is all very reminiscent of HIPS. Big ideas being brought in with little or no consultation with those actually operating in the industry. This said, one of the few things I can agree with Mr Ackroyd on is that planning for the inevitable is what we should be doing. If you all recall HIPS, total nightmare and waste of time and energy,but we all adopted new policies and procedures and worked it into our business models almost over night.
Our business is very different from the model of old with various synergy income streams a vital part of it which illustrate our tenacity and ability as agents to evolve and stay in business.
In one form or another property will continue to need to be let and, as long as providing that service enables us to generate a profitable return for our efforts, we will all find a way, of that I have no doubt.
This said, and again using HIPS as the example, I'd want to very sure if I were labour that these plans are not doomed to fail as that would result in an Ostrich sized egg needing to be wiped from their faces…
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I agree with all of these industry points. I also have a concern though relating to "no referencing fee". How on earth do these vote chasing Labour fools expect legitimate agents to recommend a tenant to a Landlord if they cannot be financially verified through the referencing process?
On the proposed three year term if the tenant is made redundant or refuses to pay from month two, the Landlord could be liable for huge losses. Rent guarantee insurance will be very expensive due to the length of the term, so rents will HAVE to increase to cover these additional costs.
As professional letting agents, how would we earn from a non-managed let ? So another hike in the rent for the marketing fees we charge our Landlords. Very Very short sighted, knee jerk, vote capturing nonsense ………… again!
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I agree there is a rogue element of overcharging tenants, but this specific problem needs to be individually addressed, rather than taking the easy way out and imposing a blanket ban. If it goes ahead, my firm will not lose out as lost fees from tenants will be recovered from landlords. In the long term, the only loser, I believe, will be tenants.
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Labour, you just don't have a clue about the dynamics of the property market do you?
'Shadow housing minister Emma Reynolds said: “If the Tories and Liberal Demcrats refuse to back Labour’s proposals, they’ll have to explain why they won’t stand up for the nine million people who rent.” '
No, YOU'LL have to explain to 9m people why their rents have suddenly gone up because there's a shortage of property so landlords have tacked it on there instead.
As for the 'Buyers don't pay fees, why should tenants?' argument, haven't they heard of the 'sale by tender' process that firms like Arun use where the buyer pays 2% so that the seller pays next to nothing?
And capping rents in a market which is so dependant on the private rented sector so that yields vs borrowing rates and risk don't stack? Priceless absolutely priceless. Landlords sell up for the rising capital values and go into commercial instead. So how does that work then when the supply of rental properties dry up? Something else you'll have to explain to 9m people when the same number of tenants are chasing far fewer properties.
But you won't though will you because by that time someone else will be in the job and blaming the 'last lot' as Miliband did when distancing himself from Godawful Brown.
Miliband couldn't run a burger bar let alone a country.
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What an ill conceived, uninformed nonsense this political gesturing is. What a great idea, I shall work for nothing! I'm obviously not offering any type of service so why should I expect to get paid. Is Miliband expecting agents to allow a potential applicant to secure a property with no funds exchanging hands. Perhaps we are expected to take the deposit up front to secure a property – None refundable if they fail the credit checks? Applying some common sense to this issue, I wouldn't allow a potential applicant to secure without a fee, I will continue to market the property and perhaps find the landlord a more suitable tenancy? Perhaps they offered an extra £30 pcm on the property in question? Great, my management fee increases! I could try and pass the lost income onto the landlord but we all know that going to be almost impossible. A more realistic way of covering the shortfall would be to introduce and increase financial penalties for defaults by tenants. Late rent payment, property re-inspection, reference letter, pet clause in AST, etc. If I cant charge them a move in fee they can simply collect the keys from the office and figure out the workings of the property for themselves and then when they phone the office to ask how to operate the central heating I can perhaps charge them for a house visit? If I call myself a relocation agent can I then charge a fee for my services? If its not broke – Dont fix it!
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“Should I Work for Free?” Shame on the Labour Party! They took small number of “BIG” Estate Agents who charge a higher Admin Fees to consider the whole UK letting business, I’m pretty sure all Estate Agents and Landlords will eventually let the tenants swallow the cost just by use different methods.
I agree that the letting sector needs to be closely monitored on how much the Estate Agents should charge by considering how much work load is involved each time. Not just ban the cost.
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I fully appreciate that there are a number of agents who do employ the practise of making as much money out of additional fees for both tenants and, in some cases, landlords. However, is the banning of fees the right approach? Surely there is a better way! The truth is that, as agents, we have costs that must be met as part of running our business, however, there are (believe it or not) those of us that charge fees proportionate to doing so rather than the overinflated fees that we are aware other agents charge (I left the employ of an agency because I didn't believe in this practice), and they are not only based in London! The truth is that we are not all bad so please Labour don't make this a situation where a small few ruin things for the vast majority.
When entering into a sales transaction for property both parties show commitment by absorbing some costs, both for sales and rentals, and I believe that this needs to remain the case. There are a number of reasons for this, in my opinion, as follows;
No financial commitment on the part of the tenant leaves them free to apply for a number of properties leaving those landlords that have 'held' properties pending referencing out of pocket. How do we resolve this potential pitfall? Reference tenants before allowing them to view and blotting their credit files? Get them to sign binding terms of some kind, surely the OFT would have something to say about this? Proceed with a number of applications against each property and operate a system akin to that of the council of having a list of interested parties to work through 'bidding' for properties?
Landlords costs will increase in terms of managing agents fees, insurance, etc. (they will have to as everyone has to cover their costs from somewhere). How will this impact the market? Landlords rents increase resulting in less affordability to tenants to absorb costs? Landlords sell their rental homes as they are no longer making a return on their investment as planned resulting in less availability which then slows the housing market as a whole and, in turn, once again drives up rents?
Then there is all of the administration and printing of stationery and all the other things that, as agents, we will need to contend with to continue our businesses. Lets be honest now, any of us that do this properly know that it certainly isn't a cheap business to get into!
I think we would be better to cap fees and look to educate both landlords and tenants to investigate both sides of the service that the agents they are considering offer. It still amazes me now that tenants will go with such 'rip-off' agents, but, Labour, this is THEIR CHOICE. Lets face it, we live in a free world (well we like to think so) on that basis tenants have the ability at present to choose to use these services or not and they are still doing so, if they didn't then things would change quick sharp without any intervention anyway.
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Meanwhile back in the real world of lettings – The EPC is a legal requirement and yet I still cant force a landlord to fit a smoke alarm. But thats OK because you will probably die of the legionella virus first 🙂
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Excellent comment
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It is the greedy agents who have caused this. Why can't Labour please look at introducing a licensing system as used in Australia. Agents there have to abide by a strict code of practice, and if they don't they lose their license. This puts a stop to landlords wanting to try to made huge increases in rents (recent example I have had from a prospective tenant here this week is that his current landlord wants to increase the rent by £350 per month on a £600 rent) and stops agents from being greedy whilst it is still recognised that they do need to be paid for the service they offer. We make just one up-front, transparent charge to tenants and then they know where they are as do we with cash flow and making a living. We do not charge landlords a finder's fee, but if legisaltion comes in to stop us making any charge to tenants then we will have to charge landlords a finder's fee, and I can foresee that they will then want that put on to the rent charged. Do something to stop some agents and, indeed, some landlords being so greedy. Please do not penalise the agents and landlords who are not greedy and just want to make a living or pension investment where landlords are concerned.
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Yet another flawed idea from the same misguided fools that brought you the doomed Home Information Pack. Don't meddle with something you just do not understand.
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I met with the Shadow Housing Minister the day before Ed Miliband made any announcement and she made no mention of this at the time. We did discuss tenants fees, regulation and potential licencing but as per her comment in the May edition of the Negotiator, she talked in terms of a requirement for letting agents to present landlord AND tenant fees in all marketing – no mention that they had plans to ban tenants fees. Ms Reynolds talked about a national register of landlords to give greater power to local authorities and overall talked a lot of sense about improving the rental market. But she was clearly very careful not to mention any aspect of their proposals that would impact so drastically on the bottom line of letting agents profitability.
Seems I wasted a few hours of my afternoon, she listened to nothing, told me what I wanted to hear and in my view withheld information that just 24 hours later was in the public domain. Why didn't she take the opportunity to be honest, in order that she could get some honest feedback from someone who's been in the industry for over 30 years. Very disappointing.
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Well done Tracy excellent comment – One thing we are all missing though is that Politicians are just that, Politicians
I am interested to know if there is any "credible" research done on the rental market in Scotland to see the effects of the law being clarified last year? Note I say the law was clarified and not changed.
If I were to turn up at our offices for 20 minutes and claim £300 form a tenant, or landlord come to that, they may have a case but these proposals are simply ludicrous. 🙁
http://www.dailymail.co.uk/news/article-2525004/Disgraced-peer-Lord-Hanningfield-claims-300-day-20-minutes-Lords.html
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Do the labour party think that hardworking letting agents will be happy to do a portion of their work for free? Or is it just that the positive vote from "9 million tenants" far outweighs he negative feeling from a far smaller number of agents.
At present, tenants think hard before applying to be referenced for a property and are bear the financial costs of unsuccessful referencing if they do not disclose a bad credit history. Under a scheme where landlords pay referencing fees, an unsuccessful reference would still need to be paid for, and there will be many more unsuccessful applications if tenants know it won't cost them a penny.
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Social rents rising well ahead of PRS and inflation! – Montague report identifies need to grow PRS and attract investment into sector. Mr Milliband single handedly now frightening of funds with chat re Rent controls and now seeking to hurt the very industry that can help solve the problem- ill informed posturing for emotional votes – its a disgrace. Fees legislation been a nightmare in Scotland – damaging. Industry needs to come together to argue back. Well done Ian Potter for getting stuck in.
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I wonder if Ian Potter will be around to advise or consult?
http://www.arla.co.uk/news/october-2013/ian-potter-to-retire-as-managing-director-of-arla-in-june-2014.aspx
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Ian Potter is now Director at Business Services for Residential Lettings Ltd
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Most Agents fees are subject to VAT so under Labours plans HMG will be losing a large revenue stream. To stop tenants messing us about we would ask them to pay their deposit before taking the property off the market.
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Great point and great strategy
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Unfortunately this ill thought our ideas to win votes will only harm the sector. It will lead to increased costs which will either filter down to the tenant or reduce levels of quality service if those costs cannot be passed on.
As the poster above wrote we would have to charge the full deposit upfront before considering taking the property off the market and also insist that before we do our own references an applicant has an up to date copy of their credit history and letters from their employers and current landlord showing their status.
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The long terms effect of this proposal will be landlord's fees to increase, as most agents operate with very tight margins, so absorbing the lost revenue would be impossible beyond the short term.
The property is that in the short-terms, landlords are going to resist increased agency fees, which will have one of the following effects:
– Agents that lose fee income cut back on costs to maintain their profit margins. This will only result in lower standards which will bad news for landlords and tenants alike,
– The unscrupulous agents that are out there will continue to charge tenants illegally, and only the agents that would lose out will be those who abide by the rules,
– Faced with a drop in revenues, letting agents may be forced to reduce their staffing levels in the short term,
– Agents with slim profit margins will go out of business within months, resulting in less competition in the industry and therefore a worse deal for landlords. If landlords face higher fees, this will trickle down resulting in higher rents. The agents that are more likely to be at risk of going out of business are those with a higher cost base – typically those who are willing to incur the costs of ARLA memberships, staff training, client money protection measures and insurance, client account audits etc – leaving cut-price agents more market share.
I think that most people would agree that politicians should stay out of private sector issues of this nature, but if they do need to get involved due to the social issues that surround housing, it should be after consulting industry experts and with a reasonable consultation period, not via a snap-vote that has the sole aim of grabbing headlines.
I am attending the surgery for my local MP this morning, and will follow this up in writing to them. I would urge any other business owner affected by these rash proposals to do the same. You can find out who your MP is via: http://findyourmp.parliament.uk/
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There is a basically open market for privately rented dwellings. Rental property is available in that market. Demand fixes the price.
How can one landlord, who may have to pay increased charges to his or her agent, manage to simply pass on all the increases through market rents? It's nonsense.
Similarly, how can any agent, appointed exclusively to work on behalf of a landlord to let a property, conceivably justify charging tenants or applicants fees for them wishing to take a tenancy (other than a tenant credit referencing check).
There ought to be some serious re-considering going on here which is the purpose of this bill.
Don't forget, the managing agent gets paid by deducting their fees as a percentage of the rents received.
The only way to make these matters 'transparent', without an inordinate amount of red tape, would be for everyone to know that no tenants should get charged any agency fees for obtaining their tenancies.
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It makes me wonder if whoever thought this up knows anything about running a business. Letting Agents are entitled to charge for the work they carry out. What is most important is that there is complete transparency and all tenant charges are declared in advance. We will still have to carry out the work even if tenants do not pay for it. What then? We either lose a proportion of our income (straight off the bottom line) or we try to charge Landlords – with inevitable consequences. This proposal will mean most Letting Agents suffering financial hardship and even going out of business.
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Then why not increase the percentage you charge landlords for the service you provide?
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Ohhh dear….
If Landlords are going to suffer a loss in yields due to higher agency costs, where do you think those landlords are going to recoup that money from?
Think about it Peter.
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I'm not always here to comment – my lifestyle won't permit me that luxury. I think I've made my point though and have little more to add.
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Well I must of missed that bit.
What point are you trying to make then?
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It's perfectly clear if you read it 🙂
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Dear Peter
if you were the landlord, would you like to pay double or tenant's fees from your own pocket?
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Why not, for a good service?
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Some very well made comments above – here (I hope) is another one: our income last year from reasonable and transparent upfront fees ran into almost 6 figures – including VAT – which of course the Exchequer will lose in future if this nonsense is allowed to pass into law. This government is always banging on about how well it's done 'creating' 1.6 million new jobs in the private sector. Well, look again because we may have to let go a couple of staff in order to stay profitable. Put that in your pipe, you pipe-dreaming brown-nosing politicians and smoke that !
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Howard Lester – Director – Balgores Lettings – Whilst I am all for regulation of Letting Agents and have long been a vocal supporter of this it seems to me that Labour are just using a soft target for political gain without much thought to how this affects the people they say they are protecting.
I have seen many people quoting increased rent so it seems unnecessary to repeat the obvious however for sure in the long term a Tenant will pay more.
Lettings fees are normally so competitive that there is a very fine line between making a profit and going out of business. This kind of thinking may well see the end of the specialist Letting Agent who provides a fantastic service to Landlords and Tenants and create a market where the sales agents who do lettings as a side-line are left to fill the market as they usually run with fewer lettings staff who are generally less informed and knowledgeable and therefore less able to make sure Tenants are looked after.
No one can tell me they get a better level of service from a supermarket than they do from an independent grocer, butcher, baker etc. Yes it's cheaper, but is this all we want when we are committing to a Tenancy?
Why should it be OK for a Financial Advisor to charge hundreds of pounds for their services as well as get paid from the provider. The answer is simple, it's to make sure they are able to afford the time and effort to best advise the person they are dealing with!
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It’s like we’ve got amnesia and déjà vu at the same time because we seem to have forgotten all of this before, at least Stevie B’s on point – get used to it because it’s coming.
Apart from when Russell Quirk exhales the only time we get all unibrow is when our divine right to charge tenants is challenged but lets not make this a thing. Landlords demand the reference so why get tenants to pay for them, Jeez that’s like buyers paying for indemnity insurance for lenders, oh wait…
We still get remunerated people except it’s by the landlord and not the tenant so quit playing possum, no one’s asking us to work for free. It’s a swift and merciless transaction that makes our hurt feelings temporary and while we’re at it, to argue a rent increase of any reasonable fee (£90.00 to £250.00 over 12 months) is as meaningful as a subscription to ARLA because in a world of unregulated crazy it was only a matter of time before we got medicated [comment of the week my a*se]. Be upset at those within our ranks with truly extortionate fees and then get really upset with ourselves for tolerating them.
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Frivolous throw away reactionary suggestion of the week; stop referencing tenants but insist each and every one of them has a guarantor and has the AST checked by a solicitor.
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I agree with the points and comments raised in the majority of the posts above. I would concur and stress that agency fees are required for those letting agencies, which are small/medium businesses, including the one that I work for.
The fee is an essential and integral element of the critical administrative services that we provide in terms of our staff time and office resources to our tenants, including tenant referencing, credit checks, drawing up and administering the AST Tenancy Agreement, collecting the deposit monies and first month's rental monies.
It is simply not feasible to unload these costs onto our landlords who already pay their management fee to us for all of the other services that we provide to them, such as for property advertising, maintenance coordination, updating the inventory, rent collection etc. and not to mention in Oxford that landlords have incurred expenditure to their respective agencies for organizing their HMO (House in Multiple Occupation) Licenses as well as paying annual fees to the Council.
In light of the above, this fee ban "will be the straw that breaks the camel's back" and many landlords in this city will therefore simply insist upon higher rents if this ban proceeds in order to shoulder their fee increase and a percentage may well choose to leave the private rented sector altogether, thereby further "squeezing" many smaller to medium agencies and narrowing the choice of properties available to prospective tenants.
Granted there are a number of 'rogue' agencies operating unscrupulous fee practises and "ripping off" their tenants with hidden charges that needs to be addressed, but this knee jerk reaction for outright abolition is at best "political posturing" and an attempt by Labour to try and ingratiate themselves to part of the electorate for short term political gain.
I would conclude by urging politicians to consult the letting industry further before making such a 'hasty' decision and at least for the foreseeable future concentrate on agents providing greater transparency and reasonableness with their charges and ensuring that these are clearly advertised rather than voting for this ill-thought through proposal.
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As an agent I agree with banning these fees. We don't charge tenants a fee and we have a higher response rate for properties and so far since dropping them 2 years ago we have not had one void period for a landlord. The horror stories of greed by agents we hear everyday is staggering with fees ranging from £50pp to £400pp. We still have a very stringent referencing procedure so we weed out the bad tenants from the good.
We receive nothing but positive comments from tenants also and we find that the ongoing relationship with the tenant is quite good.
Personally I think its pure greed by the agents, surely the fees charged to the landlord is quite enough to sustain your business.
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