Tenant Fee Ban

 One of the things that we have encountered is that some people believe it is a ban on Fees to Tenants from Letting agents, incorrect, it is a ban on fees for Agents and Landlords.

There are some unscrupulous Letting agents and Landlords (few and far between) and some uncaring Tenants. The main reason is the high up front cash tenants have to pay (most Agents advertise their fees, some add more costs by extra fees that may not be as visible!).

 We have studied the Consultation paper the Government issued and we were surprised by one or two things.

 The consultation ran from 7 April 2017 till  2 June and received  4,724 responses ( not a lot considering the importance of this proposal).

The breakdown is as follows:

Tenants 50%
Letting Agents 32%
Landlords 10%
Others 8%

 

 The highest turnout were from Tenants, we were surprised at the low response from Agents and Landlords.

The Consultancy paper consisted of 24 questions divided into 4 Groups:

Part A – Questions for all respondents (Q1-13).

Part B – Additional questions for tenants (Q14-17).

Part C – Additional questions for landlords (Q18-23).

Part D – Additional questions for agents (Q23-24).

After reading both the Consultancy paper ( http://bit.ly/2BVFKY1 ) and Response to Consultancy paper ( http://bit.ly/2lvio4z ) we found Question 8 interesting.

Q8. “What do you think will be the main impacts of the ban on letting fees paid by tenants?
Please include any unintended consequences that you believe may arise”.

Part response copied below:

The most common response from all groups was that agent fees would be charged to
landlords who in turn would increase their rents. One of the key points made by tenants
was that higher rent would be preferable to the current upfront fees, as their overall living
costs would be more affordable and transparent .

It would seem that the upfront costs charged to Tenants is the main burden that confronts Tenants, however, spreading these costs over the length of the tenancy is more manageable.

There are some fees that we at obinventories believe should be equally shared between Landlord/Agent and Tenant, a Fully prepared Inventory is vital to all parties.

We are constantly reviewing our prices and are working on a pricing policy that would enable either Letting agent or Landlord to receive some type of Bonus payment from us, this could be in the form of a credit note or a % of our fees paid back to you, we are still in the process of formalising this scheme and any feed back or suggestion would be gratefully appreciated.

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This information will help us on achieving a fair and uniformed Bonus structure.