Letting Agents will no longer be able to charge fees to tenants

Yet another ill conceived, trigger happy vote pleasing policy.

This will discourage new landlords, and while some might say "great", where is the replacement housing coming from that is needed now?

As a tenant, I faced high agent's fees, aside from the holding fee, deposit and first month's rent, and they did seem excessive at the time.

However, a more reasonable policy would be to restrict agents to charging only their actual costs up to a certain amount.

Like it or not there are considerable costs when a tenant leaves and a replacement has to be found.
As the vast majority of tenancies are ended by the tenants not by landlords or agents, it is not unfair to expect the tenants to pay for at least some of those costs.
Like Mary suggests, a far better law would be that only actual costs incurred can be passed on to tenants and agents or landlords must show a breakdown of the costs if requested.
If the change of tenancy costs are passed back to the tenant in the form of higher rent then long term tenants will be subsidising short term tenants, when it should be the other way round. That's hardly fair.

Reply to the comment left by "Mandy Thomson" at "23/11/2016 - 09:43":

I echo your thoughts entirely, having been on both sides of the tenant/landlord fence.
Plus having also worked for one of the big ARLA corporate letting agents whose fees were certainly much in excess of the imaginary £202 per tenant average quoted in this article the writing has been on the wall for some time.
I can see this plan prompting another reason for landlords, that depend on letting agents, to sell off their portfolios.
I no longer live in the area of my portfolio so am reliant on a local letting agent to carryout all the necessities to source the right tenants. Their fees are already well below the average to tenants and do not include anything other than the monthly fee to the landlord so I await with dread what it's going to cost me.
Having implemented Sec 24 rent rises to in-situ tenants for the first time last November and again this November I am running out of capacity to add yet more rent onto my tenants and don't want to either.
Unfortunately this is definitely heading towards rent capping by the authorities as well so there is massive change ahead for us I feel.

That would constitute an admission of applying up front fees and thus null and void.
You have to learn to play the game. Make the tenants acquire their own credit report. Charge tenants when they request a forwarding reference. And the remainder - build the administration into the rent. So next rent increase will consist of non allowable fees, revocation of the depreciation allowance, graduated revocation of interest claimable, inflation and demand as landlords sell up. But as a private landlord I have never ever charged anything for the works outlined.

Reply to the comment left by "Asif Ahmed" at "23/11/2016 - 11:09":

I would be concerned about having tenants apply for their own reference, as when I reference I want an extremely thorough job done, such as conducting a credit check against all addresses revealed, and an explanation for any gaps.

If I were asked to order my own report for whatever purpose, I have a vested interest in ensuring that report shows me in the best possible light - that's human nature.

As is stated elsewhere on this thread, this is another attack on the PRS by a government that does not understand basic business or what being a landlord or a letting agent is about. The cost will be passed on in the form of higher rents. So if a landlord gets charged £120 referencing fee by an agent he will put £20 on the monthly rent for a 6 month AST. If the tenant stays for 12 months then instead of paying £120 then it's £240.And rent increases will become the norm every 6 months rather than landlords not touching them for years. I have one tenant who has been in 14 years. Her rent has recently gone up £20 in that time due to preparation for Section 24 and is still £40 a month below market value. So now it will be going up over the next 3 years until it reaches todays market rent. But by that time rents have gone up again.
And how about tenants who make multiple applications knowing the landlord is paying for the reference. What is to stop them pulling out even if they have passed everything?

Do we take 50% of the first months rent to reserve the property, refundable against the first months rent UNLESS having passed all the referencing process they then pull out. Will the new ban allow this? Will it be seen as a "fee"? How do they get on in Scotland?

What a bombshell.

Reply to the comment left by "Mandy Thomson" at "23/11/2016 - 11:34":

I agree Mandy, I also want the tenants referencing to be done by an RGI provider who are prepared to put their money where their mouths are by providing Rent Guarantee and Legal Fees Insurance on the back of the tenants they approve.

Nothing to stop a landlord insisting on a tenant getting a reference from a particular provider though from what I understand
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Hi Mark. We just have to be careful as some RGI Insurers insist on the reference being done within 30 days of the commencement of tenancy. You know what will happen. Tenants will be touting round old references which will be out of date.

Reply to the comment left by "Gary Nock" at "23/11/2016 - 12:02":

Yes of course, landlords will need to insist on new ones on this basis. Also, if a tenant has a reference from a company they don't usually deal with I cannot see how they can be compelled to accept it. They will be perfectly within their rights to insist on tenants providing a reference from their chosen provider.

I suspect the referencing industry will be forced to adapt quite significantly if it needs to provide referencing for tenants directly. Will the referencing companies also be told they can't charge tenants for referencing reports I wonder?
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