MPs vote today on banning letting agents’ fees

| Rosalind Renshaw

Calls on Generation Rent’s website aimed at gathering support for today’s crucial vote on letting agent fees have been described as blatant scaremongering.

Eric Walker, managing director of Northwood, said: “It is unbelievably misinformed.”

On the site, Generation Rent says that letting agents are charging “spurious” fees (see the second and third links at the end).

It claims: “Before moving into their new home, renters often get hit with spurious fees supposedly covering administration, inventory, references, guarantors, deposit protection, maintenance charges and credit checks.

“Then letting agents find other excuses to charge more fees, for example when someone moves in or out of a shared house or at the end of a tenancy.”

Walker pointed out that an inventory could hardly be described as a “spurious fee” since without inventories, arbitration of disputes offered by both the tenancy deposit schemes and the property ombudsmen would be in tatters.

Credit checks and references also ensure that a tenant can actually afford the rent – a fact often overlooked, according to Walker.

Walker also said it was false for Generation Rent to claim that letting agents find “other excuses to charge more fees” when a tenant changes in a shared house.

Walker said: “A change of tenant may be against the term of the AST – a new contract has to be produced, while the outgoing tenant usually wants some deposit back and the incoming tenant wants to make sure they aren’t going to be held liable for anything before their tenancy commenced.

“As for the claim that agents charge tenants at the end of a tenancy – since when? Only if the tenants owe rent or have caused damage – but wait, the inventory issue may then raise its ugly head.”

Under the headline “Fancy being £500 richer next time you move home?”, a pre-drafted template which Generation Rent encourages people to send to their MP states: “Letting agents have an agreement with a landlord but most of their fees come from tenants, often in a less than transparent manner.”

Walker said: “This statement is fundamentally untrue. How many agents actually do more than pass on the cost of a service provided by a specialist independent third party?”

Walker told Eye that the industry must join forces to highlight such baseless claims.

He said: “We need to challenge every inaccurate accusation, or rents will increase, there will be fewer properties and tenants will end up paying more.”

Meanwhile, ARLA agent Maxine Fothergill, of Amax Estates in Gravesend, Kent, has successfully put up an online petition on the Government’s website urging the industry to act together and MPs to vote against banning letting agent fees.

Fothergill acted quickly after seeing yesterday’s story in Eye – the first she knew of today’s vote.

http://epetitions.direct.gov.uk/petitions/64975

http://www.generationrent.org/ban_fees

http://www.generationrent.org/mp_vote_on_letting_agent_fees

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21 Comments

  1. Mark Reynolds
    May 13, 2014 at 07:44

    Thanks Rosalind for this article and for the link to the petition, which I have signed. I am also going to circulate it to all my LA members.

    Alex Hilton has been marketing the website as a Ltd Company and he is a director. I can't find them on Companies House. Can someone please point me in the right direction so I can see what they are about please?

    Thanks

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  2. Eric Walker
    May 13, 2014 at 08:22

    This is an interesting overview of who is behind Generation rent.
    http://www.generationrent.org/about

    I note the absence of any business name, company number, legals, T & C's or cookie policy – all legal requirements.

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    1. ammik
      May 13, 2014 at 10:29

      Registration info:

      Domain Name:GENERATIONRENT.ORG
      Domain ID: D170682244-LROR
      Creation Date: 2014-01-14T11:49:06Z
      Updated Date: 2014-03-16T03:45:33Z
      Registry Expiry Date: 2015-01-14T11:49:06Z
      Sponsoring Registrar:Tucows Inc. (R11-LROR)
      Sponsoring Registrar IANA ID: 69
      WHOIS Server:
      Referral URL:
      Domain Status: clientTransferProhibited
      Domain Status: clientUpdateProhibited
      Registrant ID:tuu4sV7biV9geF1n
      Registrant Name:Alexander Hilton
      Registrant Organization:Alexander Hilton
      Registrant Street: 36-38 Willesden Lane
      Registrant City:London
      Registrant State/Province:London
      Registrant Postal Code:NW67ST
      Registrant Country:GB
      Registrant Phone:+44.77947710113
      Registrant Phone Ext:
      Registrant Fax:
      Registrant Fax Ext:
      Registrant Email:alexhilton@gmail.com

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      1. Mark Reynolds
        May 14, 2014 at 06:30

        Hi Ammik and thanks for the WHOIS info

        What I am really after is the company registration number to see who is behind the company given that Alex Hilton is parading himself as a director

        Anyone?

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  3. agentx
    May 13, 2014 at 09:48

    Well done in organizing the online petition and thanks for the link Rosalind – Me and my wife have signed this morning.

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  4. Sarah Robinson
    May 13, 2014 at 11:01

    Hi

    When do you suppose we will know if they have successfully banned tenant fees. I, for one, am concerned. I am a small independent letting agency based in Hull and Holderness (the north).

    Sarah

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  5. Eric Walker
    May 13, 2014 at 11:10

    Sarah – iI don't think it will happen. In PMQ's in response to a question from Harriot Harmen about 20 mins ago, Nick Clegg said he welcomes longer agreements and is working on a new model tenancy, however he believes banning tenant fees will increase rents and instead will work towards better transparency. She looked jolly miffed.

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  6. gunners
    May 13, 2014 at 11:19

    I'm sorry but Estate Agents act as a proxy to the Landlord – They are commissioned by the Landlord who pays the Estate Agent to carry out the work. So as a Landlord, when you pay an Estate Agent up to 17% of your rent per month (which I've seen), shouldn't that cover the administrative cost of signing up a prospective tenant?

    Where was it ever appropriate to pay costs to the Estate Agent as a prospective tenant? I dont go to a superstore and pay the till clerk a fiver for the priviledge of serving me. Slightly out of context but there is a parallel. Financial checks and Inventory checks "could" and perhaps "should" be paid for by the tenants BUT the commissioning In my view should be pushed back onto the Landlord to stump up the fees/admin.

    At the moment tenants are getting shafted by often substandard work carried out by estate agents which is completely unregulated. "Admin fees"
    could be for anything or potentially nothing! There desparately needs to be transparency and I suggest no admin fees until the regulation is in place.

    (Roger – The guy that got shafted by estate agents fees for 10 years – and now a Landlord, getting shafted from the other end).

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    1. MF
      May 13, 2014 at 13:24

      This is a good example of why we need proper REGULATION and LICENSING. Agreed there is a rogue element out there who overcharge and provide sub-standard services. They are the minority though, and an embarrassment to the rest of us. Scrapping tenant fees is not the answer. Capping fees maybe; regulation/licensing, YES. ARLA for one have been calling for this for many, many years but no Government has listened. If they had, we probably wouldn't be having this discussion.

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    2. agentx
      May 13, 2014 at 14:18

      If a landlord is daft enough to pay 17% to an ESTATE agent – He is part of the problem.

      So as a LL you are now happy to pay for the reference and credit checks Roger? What happens if those checks come back unfavorable – Are you happy to pay again for the next set of applicants? I provide my landlords with an excellent rent guarantee policy, inventory etc for 8%.

      Our staff spend an hour minimum at the property during the move-in process with the tenants and we also provide them with a copy of the inventory.

      Seems to me this is largely a London problem – Large scale greed within your own property bubble. Bring in regulation ASAP – Professional LETTING agents have nothing to fear, if anything we will simply grow our portfolio as the rogue agents are squeezed out the market place.

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  7. sam.elkington
    May 13, 2014 at 11:29

    letting fees are part of our income and if charged correctly and properly by regulated agents they should be retained.

    SAM ELKINGTON
    Senior Partner
    HE Lettings LLP

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  8. Stevie Baillie
    May 13, 2014 at 12:42

    If proper regulation (and power to bring to task those not adhering!) was put in place in a logical and transparent fashion, then all of this argument could be put to bed overnight.
    As an Independent Estate & Letting Agent in Scotland we already have the Banned Fee's, it does irk me somewhat that all you guys are "Now" up in arms because it has now come to your door.
    The industry needs professionalised asap, with clear legislation nationwide.
    We would sign up tomorrow if it were so.

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    1. MF
      May 13, 2014 at 13:10

      Well said – completely agree.

      Report
  9. denise proctor
    May 13, 2014 at 13:36

    Why don't they pick on the banks who charge mortgage applications fee and arrangement fees surly this is the same . I am a letting agent in West Yorkshire I've been doing Lettings since 1990 our fees are transparent, we do not charge for renewals, our fee is a one off fee which cover for referencing, legal documents and a electronic photographic inventory. What other profession do work for nothing.

    Denise

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  10. ammik
    May 13, 2014 at 16:18

    Stella Creasy giving it all her worth currently on BBC Parliament – flawed

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  11. mousesdada
    May 13, 2014 at 16:33

    Have just watched Stella Creasy vent with all her fury at the House of Commons . It was a fascinating performance and demonstrated a complete lack of understanding and a naivety of how both tenancies and Letting Agents work. She boldly claimed that the number of letting agents in Scotland had increased and that there had been no effect on rents since the ban. This is in direct contradiction to the many Scottish letting agents I have spoken to in these last few days. All in all it makes you wonder how many of our Acts of parliament are decided on lies, spin and political posturing.

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  12. ammik
    May 13, 2014 at 16:42

    Just to add my penneth – for eight years I've charged landlord half a months rent + VAT to find the tenant. On top of that, the cost of the check-in/check-out, and gas safety. Plus 5% plus VAT for management.

    Have never charged for renewals – landlord or tenant – nor deposit registration or tenancy agreement.

    Tenants pay £125 including VAT for one application, £250 including VAT for up to four applications. No holding deposit. No guarantor charge. No charge for reference at the end either.

    Prices in window, on rightmove etc and on our website. Worked for us.

    If the tenant charge is to be dropped, we won't be increasing charges to the landlord. We'll be doing the opposite and promoting the fact that we do free referencing to our landlords. Won't take too many new instructions to cover the cost.

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    1. ammik
      May 13, 2014 at 16:48

      Those that charge tenants for every possible thing they can and have built their business models on that basis – no wonder they're shouting.

      Personally I'm smiling as I'm a five person agency in a village up against an agent that has dozens of branches under it's own brand from Poole to Norwich plus half a dozen other brands. They;ll struggle with this more than me.

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  13. ammik
    May 13, 2014 at 19:12

    Ayes 228, Noes 281, Majority of just 53. Perhaps time for us all to revisit our individual models and future proof ourselves? Something tells me this isn't the end.

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  14. martinmelton
    May 15, 2014 at 17:50

    No it is not the end and WestBerks Properties Limited set it's business model up deliberately to prepare for this as after many months of research
    we found that the area that was most apparent was that majority of agents could not justify their fee's but skirted around the subject.

    We have a fee structure that we believe operates within sensible boundaries and is acceptable by tenants. Our landlords are not charged renewal, admin or any other fee except the monthly percentage which we believe is competitive and fair for the work we actually carry out on behalf of the landlord and even more so can be accounted for.

    When you are trusted with an asset such as property, the relationship is one of pure and real trust and cannot and should not be compromised.

    If fee's are outlawed completely, then there will be a good deal of agents that will have to sell their Ferraris and many that will have to think up some other scheme to scam landlords out of their investment of which the landlord trusted them implicitly! I say bring it on!

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  15. Teresa
    September 9, 2014 at 17:43

    I'd like to say that I as a landlady am completely disgusted by the behaviour of Kfh who conned my tenant into believing he had to sign another contract to stay on, when I only did a finders only service and paid nearly two months rent for it, and they are charging almost another 2 months rent again for doing nothing. Its not just tenants who are being ripped off.. Its criminal and should be stopped. NOW!!!

    Report
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