Belvoir’s Scottish lettings businesses lost an average of £9,000 per year, per branch, after tenants’ fees were banned in late 2012.
However, Belvoir director Dorian Gonsalves said that if a ban were to be introduced south of the border, the loss per branch would be higher.
He said: “In Scotland it was already illegal to charge premiums, so there was some knowledge of tenants’ fees being banned. The law was tightened up because there had been no real definition of ‘premium’.
“Since then, offices have lost an average income of £9,000 annually, but I think it would be in excess of that in England.”
He said that in Scotland, Belvoir agents had made up the shortfall through a variety of means, including charging landlords higher fees.
The landlords would have passed these costs on to tenants in the form of higher rents – with rents having gone up across Scotland.
Both Labour and the Green Party have made manifesto commitments to ban letting agent fees charged to tenants.
Shelter is campaigning for a ban, and Citizens Advice has also called for one.
Comments (6)
So Labour get in and, with no business acumen whatsoever, exacerbate what is already a crisis in housing in this country by introducing three year tenancy agreements and extra difficulty in removing problem tenants which make BTL Landlords bucket out of the market, rapidly dwindling the already thin stock of properties available.
In tandem with that, they abolish ‘rip off’ fees to tenants across the land and lose the ‘rip off’ tax and VAT that is generated with them thus reducing the amount of money reaching the Exchequer.
Supply and demand dictates that private sector properties become scarcer and this pushes rents up making it even harder for tenants to save to get on the property ladder.
When will career Politicians start listening to the people that actually RUN businesses in this Country before making up there next ‘back of a f*g packet’ policy?
Its no wonder that we get in a mess when most politicians are not business people. If they cant run a company why should we vote them in to run the country. They seem to think that tenants get a raw deal. Why! In my experience its hard enough getting tenants to pay to change a light bulb so please don’t make them feel any more self wounded and hard done by!
26! That’s the number of blown light bulbs the landlord is replacing before a re let that we got back last weekend goes ahead. True story
The ban on letting fees in Scotland, was accompanied by the rental deposit scheme, both of which have failed, in different ways to obtain the political result intended.
Letting fees have been replaced by higher rents, which makes it more difficult for the lower end tenant to locate a property, and leaves middle to higher end clients relatively unaffected. There also has been a slight increase in landlords percentage, or an agreed service level reduction by some agents at the previous fee.
The deposit scheme is slowly being made irrelevant in Scotland as letting agents take guarantors, who own there own property, as security in place of a deposit. Even before the Deposit scheme was introduced a months deposit, was unlikely to cover anything other than light damage, and mostly resulted in legal action against a tenant who has no means of making reparation in terms of a court order.
Guarantors who own their own homes, have fixed assets and therefore are more likely to have the means to satisfy court orders.
The icing on the cake is that by not taking deposits, it makes it easier to rent properties.
Thanks to the Scottish Governments we now recover 100% of all landlord damages, court / service costs and all of our expenses. Rather than spending money on tracing agents who locate former tenants of straw.
Finally guarantors, provide unlimited security, will pay for their guarantor forms to be completed at a Solicitors office, and makes the tenants less flippant about damages and unpaid rent……….. think about it before its implemented in England, its a win win.
Agents cannot do this work for free, who will pay the referencing companies? Landlord’s fees will increase, these will be put on top of the rent. Long term tenants will suffer with higher rents.
England be warned, this is the tip of the iceberg! If your legislators follow the disaster that is the Scottish Government then you’d better prepare for many more bits of “anti landlord” changes!!