The existence of a new body investigating costs for private tenants – including letting agent fees – has been revealed in the Commons by housing minister Gavin Harwell.
It is called the Private Rented Sector Affordability and Security Group, set up to explore ways to reduce costs for tenants. It meets under Chatham House rules.
The group has met once and is to have a second meeting shortly.
Barwell revealed its existence in a response to a petition presented by Labour MP Helen Hayes, urging the Government to cap letting agent fees.
In his response, Barwell said the Government believes that “ensuring full transparency is the best way… giving consumers the information they need so that they do not pay unfair fees, while supporting good letting agents”.
He went on: “The Government are committed to creating a bigger and better private rented sector, which is easily accessible to current and prospective tenants.
“We have set up the Private Rented Sector Affordability and Security working group which includes experts from across the PRS and housing sectors to explore options to reduce costs for tenants who access and move within the sector.
“The Government have also introduced a package of measures through the Housing and Planning Act 2016 to crackdown on unscrupulous landlords and property agents who exploit their tenants by renting out unsafe and substandard accommodation.
“This includes a database of rogue landlords and property agents, banning orders for the most prolific and serious offenders, civil penalties of up to £30,000, extended rent repayment orders and a more stringent ‘fit and proper’ person test for landlords applying for a licence.
“In addition the Government are determined to crack down on landlords who deliberately overcrowd their properties with vulnerable people and illegal migrants by extending mandatory licensing for houses in multiple occupation.”
“ensuring full transparency is the best way” so we meet in private?
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i hope they do bring it in so i can close my lettings department. Rude tenants make it impossible for decent staff to do a good job.
Once it goes 100% private, tenants will know what its really like when they deal direct with landlords.
Be careful what you wish for tenants and govt.!!
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SO… here’s the timeline from here:
1. Tenant fees get reduced
2. Tenant pays less
3. Landlord fees increase.
4. Rents increase to cover landlord fee increases – and then some.
5. Tenant pays more than before (1.) happened
Nice one, Government. Two questions:
How many people is that you’re going to be costing money instead of saving them?
How much extra tax will you stand to collect as a result?
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You are likely right, but would that not work out somewhat better for tenants? I often hear that tenants have difficulty getting money together for the deposit, admin/tenancy fees and other associated upfront moving costs within the ‘short’ notice period they get from their landlord. All this whilst having hundreds (sometimes thousands) of pounds held as a deposit for their existing tenancy.
Much the same way as getting items on credit and spreading repayments over a period of time, would obsorbing upfront agency fees into the monthly rent make it easier to move tenants around?
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I need some help here, please, aSalesAgent
Why would you think it would be “somewhat better for tenants”, either for their monthly rent costs to escalate, or to “make it easier to move tenants around“?
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Somewhat better because, as you outlined above, higher rents would only be the result of quashing tenant fees. Therefore, surely any increases in rent would be inline with the tenant’s savings at the front-end?
For example, if a family avoid paying £500 upfront to a letting agent and that competitive agent cannot pass it onto the Landlord in extra fees, “well done” that agent if they manage to negotiate a rent of £25-£50 higher than what the market price was before any suggested caps came into force. I cannot see that the family would suddently be out of pocket.
As I explained, spreading the admin fee over the tenancy period is much the same as a person buying something on credit and repaying in installments – it’s easier to manage financially.
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LL will want to recoup the increase in the first 6 months’ rent – so any tenant staying for longer will pay more as a result.
I simply can’t see a scenario where the tenant will be somewhat better off – quite the reverse.
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How about similar database of rogue tenants?
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Not sure I go along with that analysis Peebee. I think the Group may be looking at whether the fees charged are actually fair and it grieves me to say this, but with many agents, they are not. In many cases, agents charging tenants the highest fees – charge their landlords higher than average fees also. It seems that with many so called ‘high end’ agents this normally equates to their level of fees and not the level of service provided.
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I will hope that you are correct and my analysis isn’t.
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Maybe before capping letting agent fees they need to start capping ridiculous fees that agents have to pay out to property portals every month to advertise their properties? No names mentioned but there’s certainly one in particular that springs to mind!!
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