Letting agents fees ban is coming and many landlords are concerned about the rise in fees they pay for letting and management. The concern is also down to the level of service they receive and if it will be viable for many high street agents to meet their client’s requirements and still charge the same.
We received today a response from the Ministry of Housing, Communities and Local Government confirming that the government will be definitely going ahead with the ban and fee cap will not be considered. We were against the full ban of fees, instead we were strong advocates for a fee cap. It is recognised that the fees charged to the tenants, and the landlords are being abused. Such practices were started by large corporate agencies and particularly abused on London market who suffered from housing shortages for decades. We have not come across small and independent agents who would be considered abusers. However the government is looking for a quick fix to this problem and their decision is driven by simplifying the rules and policing the implementation of the new legislation.
Many letting agents and landlords acknowledge that fees charged to tenants are currently not at a level that is justifiable and agree that intervention is necessary. The Government does not believe that a cap would be effective and is likely to lead to a race to the top in terms of fees charged. A ban is easier to understand and enforce.
Should the landlords worry? As an independent local estate and letting agent we strongly advise all landlords to review their terms of business with the agent that look after their properties. Check how many things you already pay for and come on top of property management fee. We still cannot believe that there are many letting agencies that charge landlords separately for drafting a tenancy agreement. For us it is an outrageous practice along with charging extra for periodic inspections or putting mark-ups on repairs carried out at the property. We do this as part of our comprehensive service offered to our clients and frankly it is our job to do so.
Should letting agents worry? Corporate businesses have loads to lose and their management teams won’t be happy seeing anything between 20% and 45% of income disappearing. Therefore the multiple streams of profit earned from tenant fees will have to be replaced somewhere else. Independent agents usually put their clients first as it is and they are much more flexible than bigger organisations where changes have to be approved way above the shop front level. We believe that by pushing ourselves to offer the highest quality of service by delivering personal service one client at a time will work much better for independent businesses and their customers.
Independent Letting Agents are there to stay and continue to meet landlords high expectations. Therefore if you are a property owner or know someone that is, spread the word and support local, brave businesses that genuinely care and have your best interest at heart.