Banning Agency Fees Doesn’t Help Tenants, it Just Hurts Agents and Landlords
April 9, 2015 |
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Once again politicians are paying attention to the issues that they believe voters care about enough to swing their votes one way or another; in this case, it’s the turn of agency fees in the lettings industry that they believe is the key to tapping in to on-the-fence voters.
The problem is this brute force promise to outright ban fees will only work so far as forcing agents to find their money elsewhere, meaning bigger costs to the landlord. Along with the proposed rent capping, this can mean landlords have less funds available to work on their property; which in turn means a poorer standard of quality for tenants. Not an ideal outcome.
The problem seems to stem from the understanding of what an ‘agency fee’ actually consists of – if we put aside deposits and the first month’s rent, agency fees are typically quite small in comparison to the rent you will be paying on the property. And once you break down everything provided as part of the service, agency fees actually turn out at a great deal. You can read our tenancy fee breakdown here.
One thing to note is that whilst we support agency fees as part of necessary business for letting agencies, we do not agree with hidden fees or fees that are ‘tacked on’ once the documentation has been signed and contracts are written up. In this industry, the key to success and trust is open honesty – all fees should be made clear in writing prior to anything being signed so that landlords, tenants and the agents know exactly where everything stands right from the get go.
It is also important to remember that there is no legislation that demands agents sign up to governing bodies to provide protection for tenants; agencies that sign up for ARLA, SAFEagent, NALS and the other regulatory services have done so voluntarily in order to provide security and to ensure that tenants (and landlords) know that their business is being handled in an appropriate, legal and ethical manner.
Whilst this might be a great move at garnering support from tenant voters, promising that lower rent and no fees will improve the tenant experience is a pipe dream at best; if these changes go ahead and landlords take an income hit, all we can expect to see is fewer repairs and redecoration efforts in the rental sector.
We’ve written an article on why we believe tenants should pay fees when dealing with an agent, and you can read that here.
Let-Leeds is a fully accredited, award-winning lettings agency that supports any and all attempts to improve the lettings industry as long as all parties involved benefit.