Shelter should step back and consider the damage it has done in Scotland before trying to bring its campaign on tenancy fees down south.
The warning comes from Sue Hopson, brand standards director for lettings chain Martin & Co.
Martin & Co has 16 offices in Scotland, and while Hopson said that they themselves had experienced only a handful of tenants going in to their branches to demand money back, they all knew of worse-affected agents.
Hopson said: “Agents cannot provide tenancy referencing and other services for free, so they will have to charge landlords more, and landlords in turn will have to put rents up.
“Shelter may think it has been on the side of tenants, but tenants could well think exactly the opposite and believe that Shelter has done them no favours at all.
“Our biggest concern is that if, and when, rents rise, the Scottish government will be under pressure from Shelter to step in and take control of rents.
“So, on the one hand Shelter will be saying that we must not charge tenants fees, and on the other that rents are unaffordable. You just can’t win.”
Hopson said that the main difficulty for Scottish agents is that the Government has issued no guidance as to whether tenancy fees charged in the past should now be refunded.
She said: “The Government has kept very quiet. We are using a letter that ARLA has prepared for agents to send to tenants, saying that pending clarification about retrospective fees, we will not be making any refunds.
“However, Martin & Co will be stopping taking fees – the writing is on the wall. The question about retrospective refunds remains a grey area.”
She said that some Scottish letting agents are planning to get together to go to court to challenge certain tenants’ claims for refunds, in the hope of establishing a precedent.
Hopson said that Shelter would have far more difficulty in England in achieving a ban on tenancy fees: “Unlike in Scotland, where there was existing legislation, Shelter would have nothing to hang its hat on south of the border.
“It would have to do some extensive lobbying of the Government, and face a huge backlash from agents. We have a new housing minister, but I am sure he has more important things on his plate than looking at letting agents’ fees.”
Hopson confirmed that in Scotland, letting agents, including some well-established firms, are already closing as a result of the twin whammy of the ban on fees and the need to place tenants’ deposits, both new and ongoing, in a custodial scheme by November.
She said: “The ones who are closing now are just the tip of the iceberg. Others have their heads in the sand and are hoping against hope to be able to find the money.”
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Comments
Having only charged £35 inc VAT for my references and no other tenant fees whatsover over the last 12 years this new legislation is a breath of fresh air.
In Scotland we now have an even playing field and no longer will my business require to compete with 5 & 6% management fees charged by unscrupulous Agents. Why....because they can no longer make up their margins by charging ridiculous fees to Tenants.
Finally Landlords will require to select their Agent by quality of service, professionalism and integrity...not whose the cheapest by the way.
Good luck to them all along with those who have illegally spent their Tenants Deposits. It's their landlords I feel sorry for.....but then their agents were the cheapest in town "were they not"
What on earth has this got to do with Shelter? Running a business nowadays is more difficult by the day without interference from organisations that only exist in a commercial world because of subsidies!
Would Shelter like it if letting agents started to question everything that they do?
In any business environment the consumer has the choice, if the business is well run clients will return. If the busybodies at Shelter have their way many agents will simply close as profits are further eroded - who's the winner then?
Shelter should go away and get on with their core business and let us get on with ours!
We will see how fair the fees have been by the number of letting agents who go to the wall. I believe Shelter have their own agenda. There job now will be so much easier to house DSS and homeless people, thereby maintaining the grants they get from the government, if not helping to increase them. All Shelter have achieved is putting a lot of people out of business which will result in at least a 5% rise in rents. e.g. tenant gets charged admin, agency fee of £150.00 at the beginning of tenancy. charging a management fee of 10% to landlord will mean to recover the lost £150.00, will mean rents will need to rise by £1500.00 a year, or £750.00 perhaps based on the average tenant stay. Well done Shelter. What a complete waste of tax payers money, and how exactly are you a charity when the senior management there are all on over £100k a year. A complete joke!!!
There are many agents out there who do rip off both the tenant and the landlord with their high fees. However for someone to say the agent should charge the references at cost is nonsense. The person doing the checks needs to be paid....they are in employment and need to be paid and what about the overheads of the office? Rent, electric, water, rates, fuel for viewings etc need to be paid for. Nobody wants to see profiteering but you need to be reasonable. Without a profit there would be no expansion of the business or better service provision. Many agents are reasonable but if a tenant feels they are being charged too much then look somewhere else. I have an and im a landlord. I am all up for fairness.
Agents stop whining and stop treating tenants like money cows.... checks total no more than £60 or thereabouts - absorb them into existing fees or charge them at cost rather than treating everything as a profit opportunity!
Tenants increasingly get treated like they don't matter.... not acceptable!!