Pressure growing on fees charged by letting agents to tenants

Letting Agent Today reports that SAFEagent, the kitemark scheme for agents offering Client Money Protection, has backed the National Approved Lettings Scheme's (NALS) call for a cap on letting agents' fees.

Yesterday, NALS said a cap on tenant fees would represent an appropriate way of limiting excessive charges, rather than a blanket ban. 

John Midgley, chair of the SAFEagent Steering Group, has praised NALS for opening the debate on letting agent fees, describing the organisation's suggestion of a cap as 'sensible'.

"SAFEagent exists to help protect and support the consumer, and anything that helps make renting fairer can only be a positive thing," says Midgley.

"We'll be getting involved with discussions on capping fees, and we urge others to do the same."

NALS chief executive Isobel Thomson has urged the industry to speak with one voice and offer the government a solution to the problem instead of sleepwalking into a blanket ban on fees

The Renters’ Rights Bill, which proposes an outright ban on fees charged to tenants, mirroring similar legislation in place in Scotland is currently making its way through parliament.

My own view is that the term Letting Agents covers a very broad spectrum of organisations, from those adopting professional standards to those who operate unscrupulously.  At present the orientation of the industry is ‘to do it to’ tenants to protect the landlord from tenants.  There is an opportunity for tenants to take responsibility, and recognise that if they were buying a property instead, they would need to take the time and effort to present their data, and themselves in the best way to ensure that they achieve their desired outcome.  Too often when renting properties, tenants fail to recognise that they will benefit from taking a similar level of personal responsibility.

Landlords value good tenants.  Research shows that most landlords would accept lower rent to secure good tenants, who look after their property and pay their rent on time.  However, too often, their experience is very different, with tenants failing to maintain acceptable levels of cleanliness, and failing to report routine maintenance required, resulting in substantial cost to return the property to its former standard once that tenancy ends.

In Scotland, it appears that the ban on tenant fees, has resulted in a shift of costs towards the landlords themselves.  Nationally, in the wake of stamp duty and mortgage interest rate legislation, there is a shift by landlords way from 12 month tenancies towards short-term holiday and business lets where returns are felt to be higher.  At a time when the UK supply of housing is so low, anything that risks reducing the supply of properties for residential use has to be a bad thing.  Heaping an ever greater financial burden on landlords would risk more withdrawing from the residential letting market.

It seems far better for Government to legislate to target the unscrupulous letting agents, and encouraging professional agents to charge appropriate fees to both landlords and tenants, reflecting the two-way nature of property rental.