I read the Labour Party’s promises as worded on their own website. Here are just a few thoughts to vent my anger.
I am a strong supporter of tenants’ rights.
However, one must not forget that without landlords, there would be no tenants and as such, landlords are a service provider.
Considering the shortage of properties in the PRS, anything which discourages good landlords can only have a negative effect on those whom Ed Miliband claims to help.
In the following points, the opening sentence in italics is the Labour party’s own wording.
* Legislate to make longer-term tenancies with predictable rents the norm.
There are very few agents which discourage long lets as commission is based upon rent reserved.
In my experience, both landlord and tenant resist long lets and prefer no more than a year, with the option to renew. In fact, many tenants insist on a break clause in case their situation changes or the landlord fails to perform their obligations, whilst many landlords insist on the same in case the tenant fails to perform their obligations.
A request for a tenancy longer than a year is rare, but very welcome.
Further, many freeholders, particularly in prime London, expressly prohibit longer tenancies, and whilst statute of course overrides contract, can simply refuse to grant permission. Even if this requirement was enacted, there are still mandatory grounds for possession which the inventive landlord could employ.
I wonder whether Labour will address the awful situation where a good tenant is evicted when a landlord is repossessed and the mortgagees in possession simply change the locks?
Finally, if the courts could speed up the eviction process and local authorities stopped advising tenants to simply not pay rent and stay in a property until the bailiffs arrive, landlords would have more confidence in the system.
* Regulate letting agents so that instead of a free-for-all, consumers get a fair deal.
Absolutely. The industry has been saying this for years, but the myriad of Labour housing ministers refused point blank so to do.
The Conservatives haven’t been much better, but their proposed requirement to compel letting agents to be part of an independent redress scheme is a step in the right direction.
Grant Shapps also asked the industry to start the process through self-regulation and consumer awareness. SAFEagent was just such an initiative and extremely well supported by Government.
I can think of no member of ARLA, NAEA, RICS, NALS or the Law Society who would resist regulation.
Not only does it help protect consumers, but it also creates a level playing field on which agents can compete.
Too often, landlords go with cheap agents who do not incur the costs of self-regulation and consumer protection, not realising the risks this ‘saving’ carries.
The issue remains: how many non-regulated agents have holes in their clients’ account?
If regulation is thrust upon industry, many consumers will lose money. For consumers, read voters.
Recently, a woman was sent to prison for two years for stealing customers money from her letting agent employer.
Sadly, when a firm does the same thing, no one acts as it is deemed to be ‘overtrading’. There needs to be regulation, proper policing and a deterrent.
* Crack down on complicated letting agents’ fees to ensure rip-offs do not happen.
Assuming Mr Miliband is aware of the recent ASA ruling and the requirement for letting agents to display compulsory fees before a tenant enters into a transactional making decision, then I am not sure whether he is criticising the work of the ASA and suggesting it remains inadequate.
He may be right, as there are a large number of agents which have simply ignored this requirement.
The key here isn’t the regulation, it’s the policing and enforcement.
Policing to date has been consumer led, as until a consumer complains, there is unlikely to be any action.
The issue is that very few consumers know the rules and many still say nothing as they just want to secure a property at a time when there is a shortage.
I have always believed a simple law could resolve this stating: “Any fee or charge an agent imposes and which was not disclosed in writing prior to the commencement of the tenancy cannot be charged at a later and any attempt to do so is an offence punishable by [a multiple] of that proposed fee or charge.”
Additionally, Miliband is seeking to abolish tenants’ fees altogether.
Many agents are struggling to make profits, and let’s not forget, many of these agents provide a service to tenants as well as a duty of care. If fees were abolished, these fees will be passed on to the landlord and ultimately rents will rise. Combine this with longer-term tenancies, and tenants will probably pay more. Much has been made of the abolition of tenants’ fees in Scotland, but it is well known that a number of agents still impose charges. The key isn’t regulation – it’s transparency to ensure tenants have an informed choice.
* Introduce a national register of landlords so councils can take action against the minority who exploit their tenants.
A national register would only serve to be a register of landlords who comply with legislation.
Even a landlord fiddling his tax would resist signing up, and again, how would this be policed?
The most vulnerable tenants would still use rogue agents to secure a home through landlords driven further underground.
Regulate the agents and give someone teeth to police the legislation … and we will start to get somewhere.
* Eric Walker is managing director of Northwood
As a small independent letting agent of over 25 years' standing, I completely agree with everything you have said, Eric. Time and time again I have seen new regulations brought in which are not policed. They are flouted by the unscrupulous agents and landlords while the honest and decent amongst us are left with higher trading costs. Seems to me it is Government ultimately putting not only agents and landlords but also tenants at a disadvantage as a result.
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With an election in the offing politicians will promise anything to grab a vote and Labour have realised that there are an awful lot of tenants out there. However there are also a lot of landlords, estate agents and letting agents who are unlikely to vote for a party whose policies will damage their businesses so the ploy may be counter productive. In any case politicians are notorious for not keeping their promises – Cleggy's promise to abolish students fees before the last election is one that comes to mind.
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Looks like Labour are trying to call a vote on the banning of letting agent fees next week…..
http://www.bbc.co.uk/news/uk-politics-27323352
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As usual, wise words from Mr Walker!
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I will have to seriously consider laying off a member of staff UNLESS my landlords accept an increase in fees.
Just as the deposit scheme fiasco has lead to unscrupulous tenants disputing legitimate deductions at no consequence, and the costs of the schemes being met by all, (mostly good tenants) the cost of this spiteful move will no doubt be met by increased rents for all.
Can we now have other businesses fees looked at? I suggest we start with Solicitors, then perhaps auto mechanics. Having dealt with a lot of public sector applicants I can say without doubt most seem overpaid for their job description, how about them?
Tenants create a lot of work in a number of ways, why oh why are we expected to work for nothing?
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Very well put together Mr Walker, much better your reasoned argument than my angry explosion! I'm still angry by the way…
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I may lose my business if these fees are abolished. I am a working mum and I set up my own lettings administration and property management company for agents who don't want the hassle of lettings. The agents and I who have small lettings portfolios require the fees to cover the costs of setting up a new Tenancy as this can take a lot of time and in some cases Tenancy Agreements need to be completely taken apart and put back together again which of course can take days.
I would not be able to afford this time if the fee was not in place, again referencing can take a week or so and the chasing involved takes time. Some agents out source the referencing to specialist firms, these luxuries will be pulled back and what happens to the referencing firms who rely on the agents for their livelihood?
To look at the otherside, some agents may be charging higher fees than others, why not look at the fees charged and regulate the fees so that there is standard fees that all agents have to abide to.
Getting rid of the fee all together will only mean that lettings departments close, employers have to make employees redundant, Fees will go up to all Landlords and rents will have to rise in order to counter balance the abolished fee.
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