Make Renting in the UK Fair – Banning Fees that Agents Impose on Renters
A Good Lesson Learned from Scotland - But Where's The Actual Ban?
Last November we reported that the UK Government had announced that they would be imposing a ban on letting agents’ unregulated fees against tenants as soon as possible. A move that was warmly welcomed by tenants and campaigners alike, not unsurprisingly because these costs can add several hundreds of pounds to the renter’s expenses, on top of the first month’s rent and deposit.
Following Chancellor Philip Hammond’s announcement, it was reported that the share value of large Letting Agents fell substantially. That’s hardly surprising because it is estimated that these additional, disproportionate and unfairly leveraged fees imposed on tenants represents as much as 20% of their total revenue. The original consultation was due to happen in January 2017, with the Government offering a promise to introduce a ban in support of fair fees for tenants, stating that the ban was to be introduced 'as soon as possible'. It's now disappointingly expected that this final consultation won't be held until the end of 2017. This fading commitment and uncertainty surrounding the time frame is delaying the ban coming into force.
Tony Coe, Founder of Saunders 1865, the UK's leading VIP relocation company representing renters, commented: “Frankly, this is pathetic by Government. It was a sound decision to impose the ban. What is there to consult about? Simply follow the successful Scottish model and ban landlords’ agents from charging ANY fees to the tenants. It is their clients, the landlords, who should be paying their fees.”
Tony continued: “It’s money for old rope! Letting Agents represent landlords and it is landlords that should be paying their fees. Tenants do not employ the letting agents, landlords do. Renters are being forced to pay hundreds of pounds in admin fees on top of the hefty commissions that Agents earn from the client landlords. It’s a rip off and we’re already seeing the most reputable agents backing away from this sharp practice. It is welcome news that the Government is putting a stop to this sharp practice”.
As the law currently stands in England, according to Section 83 of the Consumer Rights Act 2015, agencies should not be charging any ‘surcharges or hidden fees’ which has certainly been the case for many tenants we’ve spoken with or cases of victimised renters reported by the media. The stories are many and varied. Tenants who still haven’t received their deposits back going on four months after move out; Tenants charged upwards of £500/person and when they attempted to pushback, the agent hung up on them; Tenants who were given the run around with emails meant for other clients or automated texts. This must stop.
The largest scare tactic on the agency side – primarily propagated by the Association of Residential Letting Agents (ARLA) – is that it will end up being the renters that suffer because the ban will drive up prices for tenants. A likely story! As if landlords don’t charge the max rents they can anyway!! It's simply a falsehood to expect that rental prices can increase further simply on the implementation of a ban to prevent tenants from being exploited.
One only has to look to our Scottish neighbours to see what the impact of such a ban has had in Scotland - via the Housing (Scotland) Act 2006 and through the most recent Private Housing (Tenancies) (Scotland) Act of 2016. There is zero evidence to support the contention that rents in Scotland have increased as a result.
Rent growth has actually slowed over the past year - and looking back 6 years, rents have not increased any faster than the rest of the UK. See graph.
In short, increased regulation has not meant increased rent.
So what does that mean for us here in the UK? We believe that it’s time to stand up for tenants’ rights. It’s time to get specific on what exactly is covered in these generic ‘admin’ and ‘inventory’ charges so that we can write legislation that includes all types of fees and upfront costs. It’s time to empower our clients to know that they can switch to a different agency with no costs and still acquire the property of their dreams.
At Saunders 1865 we want to partner with you in that endeavour. We’d love to hear from you, our valued clients, as we fight for your rights.
If you have any questions about this upcoming ban, or if you’d like to consult with one of our Renter Advocates about your own situation, please CLICK HERE for our contact form.
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