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Tenant Fees Bill Introduced to Parliament

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Breaking News over at Property Industry Eye

http://www.propertyindustryeye.com/eye-newsflash-tenant-fees-bill-introduced-into-parliament/

The ban on letting agent fees charged to tenants is getting closer, with the Tenant Fees Bill introduced into Parliament this afternoon.

The new Secretary of State for Housing, Communities & Local Government, James Brokenshire, has published it, saying that the ban will save tenants around £240m a year.

The Bill will also seek to cap deposits at the equivalent of six weeks’ rent. It is likely to become law next year.

In a separate impact statement, also published this afternoon, the Government said the ban would cost letting agents £157.1m in the first year.

Brokenshire said: “This government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs.

“That’s why we’re delivering our promise to ban letting fees.”

The statement goes on:

The Tenant Fees Bill will stop letting agents from exploiting their position as intermediaries between landlords and tenants, and prevent unfair practices such as double charging for the same services.

It will also help to increase competition between agents and landlords, which could help drive lower costs overall and a higher quality of service for tenants.

Other key measures in the Bill, which reflects feedback from a recent public consultation and pre-legislative scrutiny from the Housing, Communities and Local Government Select Committee, include:

  • capping holding deposits at no more than one week’s rent. The Bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant
  • capping the amount that can be charged for a change to tenancy at £50 unless the landlord demonstrates that greater costs were incurred
  • creating a financial penalty with a fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution
  • requiring Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal
  • prevents landlords from recovering possession of their property via the section 21 Housing Act 1988 procedure until they have repaid any unlawfully charged fees
  • enabling the appointment of a lead enforcement authority in the lettings sector
  • amending the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla
  • local authorities will be able to retain the money raised through financial penalties with this money reserved for future local housing enforcement

Alongside rent and deposits, agents and landlords will only be permitted to charge tenants fees associated with:

  • a change or early termination of a tenancy when requested by the tenant
  • utilities, communication services and Council Tax
  • payments arising from a default by the tenant such as replacing lost key

The new measures are subject to Parliamentary timetables and will be introduced in law next year.

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18 minutes ago, EnglishinWales said:

Next year is not good enough.

 

But its better than nothing..... 

The S24 ramps up to 75% and a fee ban, tjats going to hit Landlords and LL at the same time. Dont forget some Letting agentd also rent out properties, so a double hit

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Great news.  Is it just a coincidence that the wheels on this started to turn again or was Sajit Javid holding it up?  

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32 minutes ago, EnglishinWales said:

Next year I will be 35.  My youth spent making LAs and LLs rich. :(

Well, at least you've got nice weather.

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1 hour ago, Monkey said:

But its better than nothing..... 

The S24 ramps up to 75% and a fee ban, tjats going to hit Landlords and LL at the same time. Dont forget some Letting agentd also rent out properties, so a double hit

Oh yes. 

Boiling a frog. 

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On 04/05/2018 at 09:39, fru-gal said:

Nice to see lots of instances of

Quote

Government’s response: We are not accepting this recommendation

in response to "recommendations" weighted heavily in favour of landlords.

 

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17 minutes ago, TonyJ said:

Will agents continue to charge fees to the bitter end ie the date the ban comes into force? Or will they try to convert to some new business model, abandoning letting fees before that date? If they hold on to the old, dead model until the bitter end, it may indicate they cannot find a new business model, and they know they will not survive.

More panic for 118 when they find that either they dig deeper to use agents or try to run the show themselves.

Not so easy for the fools in the south who bought in Northern towns etc.

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35 minutes ago, TonyJ said:

Will agents continue to charge fees to the bitter end ie the date the ban comes into force? Or will they try to convert to some new business model, abandoning letting fees before that date? If they hold on to the old, dead model until the bitter end, it may indicate they cannot find a new business model, and they know they will not survive.

Some family who needs a rental, and faced with huge fees but they know fees are soon to be abolished. They are not going to want to pay and (hopefully) there will be DM stories about vampire bloodsuckers etc.

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On 02/05/2018 at 15:42, rantnrave said:
SOme of the comments display how deep the denial runs.Talk of raising rents-depsite the fact that there was no evidence of it in Scotland etc etc
 
 
Simonr6608

It will also help to increase competition between agents and landlords, which could help drive lower costs overall and a higher quality of service for tenants.

How have they come to this conclusion, the agents that charge low landlord fees and sky high tenant fees will probably fall by the wayside with that business going to others. Less agents will mean higher costs to landlord which in turn will translate into higher rents so really tenants will be worse off. Surly a cap on fees would have been a more sensible option.

 

The Bill will also seek to cap deposits at the equivalent of six weeks’ rent.

As most landlords ask for additional deposit for tenants to have pets in the house by doing this landlords will just refuse this request, once again the tenant loses out.

 
TheAgent48

Simple solution for agents and landlords, do as we intend to do.

Increase the letting fee from 10% to 14% advising the landlord that as we charged tenants in the past and are no longer allowed to, to continue managing your property we intend to increase the rents across the board to cover the additional charge to you the landlord.  In this instance the rent is £400pm now rising to £425pm.  The landlord sees none of the additional costs this is borne by the tenant.

If everybody followed this principle the “tenant fees” would be simply added to the rent as they should be.  Incidentally the only losers then would be the long term tenants.  Well done UK government unintended consequences.

This is quite legal and if done universally no landlords or agents will lose out.

Well done shelter…..cracking job!!!!

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Wow, you're right their arrogance is astonishing.

I look forward to the day when this is fully implemented and rents haven't risen.

The day when section 24 is fully implemented and rents haven't risen.

And all the other policies fully implemented and rents haven't risen.

What will all these idiots say then? They won't be able to say "I told you so" because it won't have happened. They won't say "I was wrong". Perhaps they'll just disappear. That would be fine, too.

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10 hours ago, Sancho Panza said:
SOme of the comments display how deep the denial runs.Talk of raising rents-depsite the fact that there was no evidence of it in Scotland etc etc
 
 
Simonr6608

It will also help to increase competition between agents and landlords, which could help drive lower costs overall and a higher quality of service for tenants.

How have they come to this conclusion, the agents that charge low landlord fees and sky high tenant fees will probably fall by the wayside with that business going to others. Less agents will mean higher costs to landlord which in turn will translate into higher rents so really tenants will be worse off. Surly a cap on fees would have been a more sensible option.

 

The Bill will also seek to cap deposits at the equivalent of six weeks’ rent.

As most landlords ask for additional deposit for tenants to have pets in the house by doing this landlords will just refuse this request, once again the tenant loses out.

 
TheAgent48

Simple solution for agents and landlords, do as we intend to do.

Increase the letting fee from 10% to 14% advising the landlord that as we charged tenants in the past and are no longer allowed to, to continue managing your property we intend to increase the rents across the board to cover the additional charge to you the landlord.  In this instance the rent is £400pm now rising to £425pm.  The landlord sees none of the additional costs this is borne by the tenant.

If everybody followed this principle the “tenant fees” would be simply added to the rent as they should be.  Incidentally the only losers then would be the long term tenants.  Well done UK government unintended consequences.

This is quite legal and if done universally no landlords or agents will lose out.

Well done shelter…..cracking job!!!!

He seems to miss the biggest flaw in his plan - that if is very big.

And for any high street estate agents reading this thread automation will destroy your business model https://www.openrent.co.uk/online-letting-agent-pricing-and-fees shows what prices are going to be. 

Openrent does seem to miss out the sorting out repairs bit of a management agreement but don't worry someone will be along to offer that as a fixed fee soon enough.

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10 hours ago, mrtickle said:

Wow, you're right their arrogance is astonishing.

I look forward to the day when this is fully implemented and rents haven't risen.

The day when section 24 is fully implemented and rents haven't risen.

And all the other policies fully implemented and rents haven't risen.

What will all these idiots say then? They won't be able to say "I told you so" because it won't have happened. They won't say "I was wrong". Perhaps they'll just disappear. That would be fine, too.

But rents are rising aren't they.

Every day the price for a square foot creeps up as the population increases.

People being crammed into ever smaller and smaller spaces.

S24 wont stop it, letting fees wont stop it. Nothing can stop the fundamental forces driving the market.

We must increase the available square feet to rent, or we must reduce the people looking to rent said space.

That or the rent will only go up as more people compete for the same amount of space.

I would love to see the exact Square feet per person available to renters, that ratio is only going one way isn't it?

Can you imagine in 10 years everyone on this forum saying "see, rents went down 10%, while they squeeze into their studio coffins, 100 to a flat"

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19 hours ago, Sancho Panza said:
TheAgent48

Simple solution for agents and landlords, do as we intend to do.

Increase the letting fee from 10% to 14% advising the landlord that as we charged tenants in the past and are no longer allowed to, to continue managing your property we intend to increase the rents across the board to cover the additional charge to you the landlord.  In this instance the rent is £400pm now rising to £425pm.  The landlord sees none of the additional costs this is borne by the tenant.

If everybody followed this principle the “tenant fees” would be simply added to the rent as they should be.  Incidentally the only losers then would be the long term tenants.  Well done UK government unintended consequences.

This is quite legal and if done universally no landlords or agents will lose out.

Well done shelter…..cracking job!!!!

"If everybody followed this principle"... Yes mate, but that's not how markets work, is it? Prices don't all move in lockstep. Why would landlords choose the letting agent that charges a 14% management fee when they can choose one that charges 10%? Why would tenants rent for £850pcm when the landlord that went with the cheaper letting agent charges £800pcm?

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I am glad to see this is not being conveniently forgotten by the government.

It will increase competition amongst letting agents (because they will now have to justify their fees), and amongst landlords (because it will cost less for tenants to move).

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How do "Open Rent" manage (they charge no fees to tenants)? I always see lots of their boards in London. Surely if they can manage the no fees model, other agencies can?

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14 minutes ago, zugzwang said:

Yes. 1.9% nationally, on average. According to Hamptons.

dd-composite-rent-table-3.jpg?w=960

Interesting choice of colours.

Red = Rents up = Bad

Green - rents down = Good

 

Any similar stats on house prices would have the reverse.

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Just now, ccc said:

Interesting choice of colours.

Red = Rents up = Bad

Green - rents down = Good

 

Any similar stats on house prices would have the reverse.

Well spotted. I nicked that chart from an article in the Sun about haggling with your landlord to get a rent reduction!

https://www.thesun.co.uk/money/6280944/uk-rent-prices-fall-north-england/

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Tenant Fees Bill – MPs unanimously vote through second reading

 

https://thenegotiator.co.uk/mps-vote-through-2nd-reading-of-tenant-fees-bill/

 

Looking good!

 

Quote

Letting agents hoping for a miracle defeat for the Tenant Fees Bill last night in the Commons during its second reading were disappointed when it was passed unanimously by MPs following a three-hour debate.

 

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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