AvoidDebt

Ban on letting fees to cost single-office business £85,000 a year, claim

50 posts in this topic

Good. Only goes to show how much they fleeced renters, many of whom struggle. Now they can rob the LL to makeup their 'loss' which is another positive in this.

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The agent that looks after my rental have just put their fee's up to £100 (from 90) so that they can get me to sign a photocopied rental agreement for six months.

 

It has to be paid in cash as well, makes you wonder if the taxman knows.....

 

 

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“Perhaps the best solution is for agents to focus on the opportunities that a ban will create.

“Using their own client data to generate substantial new revenue streams from third party providers is a case in point – an approach that we have been working on with many of our clients for some time.”

Make sure you tick the box - that you do not want your data to be sold on.

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Here's some free ideas for EA losing out.

-Go 100% online - is there a letting agency that is 100% online? It looks like a new area. We have Purple Bricks.

For the Tenant side:

-Sell new products. Tenant Insurance? In case the "nasty" landlord does a runner.

-Bi-annual Tenant Health checks £100. Basically like a pack agreed amongst other Letting Agencies to say how good you are. Like a no claims bonus for driving saving you money.

-Experian-type Tenant Score improvement appointments linked to the above.

Etc. Invent a load of admin type stuff that can be wrapped up into a product, packaged and sold.

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1 hour ago, SirGaz said:

The agent that looks after my rental have just put their fee's up to £100 (from 90) so that they can get me to sign a photocopied rental agreement for six months.

 

It has to be paid in cash as well, makes you wonder if the taxman knows.....

 

 

 

You should alert HMRC to this fact.

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Some good comments
 
'Eric Walker

I am not sure these numbers tell the true story. Averages are seldom indicative of the extremes they represent. It’s fair to say that agents which have charged tenants the most will be the biggest losers as will those who used tenant fees to effectively subsidise commissions to landlords to win instructions by undercutting competitors. I have little sympathy. To a degree, these agents have fueled the sanction as have those who refused to display fees transparently.

For those agents who charge a fair fee for a great service to tenants by offering help and support not just in setting up the tenancy, but throughout the term, I feel very sad. The claims we just print a few documents are ridiculous. Ensuring tenants are treated properly and that landlords meet statutory obligations is crucial.

From what we have seen from acquisition opportunities, few agents will lose less than 8% of income, some as much as 22%. Contrary to popular misconceptions, most agents don’t make huge margins and this ban will wipe out profits. Now is the time to take stock, calculate the effect and plan accordingly. The ban is going to happen.

Those who don’t plan wont simply let their businesses go under. They may cut staff, cut corners and even feel tempted to dip in to client’s accounts. This Government policy is still unclear as we still don’t know whether the ban will include reference fees, inventories, maybe even the cost of a lost key.

Whatever the outcome of the consultation, now is the time to look closely at how you will deal with this change. Our acquisitions team has never been so busy and its suprising that some agents we speak with still think the ban may not happen. 

And to those who think that enforcement will be an issue as it has been with so many other regulations, this will be policed by the biggest enforcement team around: Tenants themselves. '

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'RichardHill61

If we hadn’t sold our 2 branch business we’d have been looking at a revenue loss of £200k per annum from the ban!

I don’t think it’s possible to re-coup the full loss from landlords or other income streams. Why would landlords pay more im such a competitive market.

The problem is the admin work still needs doing & the phones need answering so making redundancies won’t be that straightforward! It’s not like letting agents are over staffed for the sake of it!

I imagine sales & lettings staff will need to be more multi skilled and some small business may call it a day!'

 

That last line........................I think I've wet myself.

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5 hours ago, AvoidDebt said:

ban on letting agent fees charged to tenants will result in a loss of income of £85,000 for a single-office business and over £850,000 for a multi-branch network, it has been claimed.

http://www.propertyindustryeye.com/ban-on-letting-fees-to-cost-single-office-business-85000-a-year-claim/

And how much income do all the tenants who have to pay letting agents fees lose in a year (combined)? Must be a fair amount.

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10 hours ago, Kiwi_Muncher said:

I'm shedding tears

 

Of laughter!

I laughed until the tears ran down my leg!

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7 hours ago, Sancho Panza said:

'RichardHill61

If we hadn’t sold our 2 branch business we’d have been looking at a revenue loss of £200k per annum from the ban!

I don’t think it’s possible to re-coup the full loss from landlords or other income streams. Why would landlords pay more im such a competitive market.

The problem is the admin work still needs doing & the phones need answering so making redundancies won’t be that straightforward! It’s not like letting agents are over staffed for the sake of it!

I imagine sales & lettings staff will need to be more multi skilled and some small business may call it a day!'

 

That last line........................I think I've wet myself.

What a shock. Landlords won't pay for something! Wow! Who would have thought it?

Im amazed that Landlord haven't already started complaining these costs will be passed on to them and claimed they'll pass it onto tenants as a tax, they could call it the tenant tax.

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Do you reckon this will increase the disposable income of tenants or just lead to higher rents?

Only more disposable income surely means more money for local businesses and the services those small businesses use. 

 

I don't mean to imply they have much if any control of rents. They like yo think they do.

Edited by spacedin

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It's interesting that agents are saying that they can't just move the cost onto landlords. If that's true, then this would be a relatively rare example of a category of cost removed from an area of commerce by government dictat rather than market pressure. This is a business that basically doesn't exist at all in a lot of countries (e.g. Canada) due to similar laws so maybe this is the beginning of the end for scumbag letting agencies? We can only live in hope!

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True to form, the solution to all business problems, jus raise the rents... 

Giarc29

I can’t see the problem. Ask month ONE at a higher price ie £1100, then remaining 5 months etc at £600 pcm. Tenant fees are replaced by increasing the first month’s rent and letting agents charges will be deducted from this (ie now from the landlord). It just requires drawing up a new AST to confirm the above.

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8 minutes ago, AvoidDebt said:

True to form, the solution to all business problems, jus raise the rents... 

Giarc29

I can’t see the problem. Ask month ONE at a higher price ie £1100, then remaining 5 months etc at £600 pcm. Tenant fees are replaced by increasing the first month’s rent and letting agents charges will be deducted from this (ie now from the landlord). It just requires drawing up a new AST to confirm the above.

River in Egypt... 6 letters...

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1 hour ago, AvoidDebt said:

True to form, the solution to all business problems, jus raise the rents... 

Giarc29

I can’t see the problem. Ask month ONE at a higher price ie £1100, then remaining 5 months etc at £600 pcm. Tenant fees are replaced by increasing the first month’s rent and letting agents charges will be deducted from this (ie now from the landlord). It just requires drawing up a new AST to confirm the above.

My previous studio flat (bedsit) rental wanted 960/month including bills in an HMO. The EA (Haart) got a fee of 600 but that was deducted from the first month rent.

How does that make money for the landlord you ask, the answer is that the deposit was not secured and the landlord had no intention of handing it back. Yes I know all about AST and deposit protection (now) but it worked very well for them. 

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Letting agents really are that man in the desert selling bottled water to the dying.

They deserve every shafting they get.

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Meanwhile, Citizens Advice has called on the Government to “enact a complete ban on any fees to tenants as soon as possible”.

Citizens Advice said that the ban should be put into the statute books as soon as possible.

It said: “For every month the ban is delayed, renters pay in excess of £13m in unfair and uncompetitive fees.

“It also needs to be a complete ban, legislated using crystal-clear wording. This is the only way to ensure that tenants can understand and uphold their rights, and that breaches of the law are enforced.”

http://www.propertyindustryeye.com/cma-says-it-cannot-review-letting-agent-fees-because-of-insufficient-time-before-ban/

 

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10 hours ago, Funn3r said:

My previous studio flat (bedsit) rental wanted 960/month including bills in an HMO. The EA (Haart) got a fee of 600 but that was deducted from the first month rent.

How does that make money for the landlord you ask, the answer is that the deposit was not secured and the landlord had no intention of handing it back. Yes I know all about AST and deposit protection (now) but it worked very well for them. 

If they didn't secure the deposit in a deposit scheme and if you have any proof of the deposit then i suspect you can retrospectively still get it back and more, how long ago was this?

 

(Won't need to prove anything related the state of the property, if the deposit was illegally held then you're entitled to it all back and double according to my understanding)

Edited by Si1

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Back in the 90s when you paid no fees, there were enough letting agents apparently making a profit just from reasonable commission on much lower rents. So why can't they now?

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13 hours ago, TheBlueCat said:

It's interesting that agents are saying that they can't just move the cost onto landlords. If that's true, then this would be a relatively rare example of a category of cost removed from an area of commerce by government dictat rather than market pressure. This is a business that basically doesn't exist at all in a lot of countries (e.g. Canada) due to similar laws so maybe this is the beginning of the end for scumbag letting agencies? We can only live in hope!

Its not a business. Its a made up scam, thats why.

 

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