So lettings fees, what are they all about?

Like it or loath it, chances are if you are looking to rent a property through a lettings agent you’re going to face what can only be described as a ‘letting fee’. This rather non-descript term is used to explain the fee that is charged by agents to potential tenants for administrative and vetting purposes before you even move into your new rental property.

The justification of these charges is to subsidise (if not completely cover) the agent’s administrative costs that are borne by preparing all the paperwork and documentation that is required to secure a let. Typically, these fees are pretty universal and likely to set you back somewhere between £200 and £300.

But what are the fees for?

Generally, the fee would be used to cover the cost of:

1.    The administrative of preparing tenancy documentation

2.    Credit reference checks

3.    References from banks, employers and/ or previous landlords

A good agent should always make a prospective tenant very clear of these costs before any agreement is signed. Clearly this is not always the case, so it is always sensible for a tenant to ask for the following:

1.      A full list of fees (if the agent does indeed charge)

2.      Details of the services that this includes

3.      If the agent is affiliated to any Trade Bodies, and if so, which?

Since November 2013, all Lettings Agents in England must disclose upfront any fees they charge on top of the rent and deposit in their adverts and lettings. (Please note, property portals like Zoopla and Rightmove are exempt from these requirements)

Further costs

But that’s not all. As a tenant, you will also more than likely be expected, quite legitimately to pay for:

1.    A holding deposit to secure a property

2.    An Inventory Report

3.    A Renewal fee for renewing the tenancy agreement when the fixed term ends.

A holding deposit should only be made when a prospective tenant has decided 100% to take a property, and wishes to secure it whilst the administration process is taking place. The holding deposit guarantees that the tenant will take the tenancy and should always be supported with written confirmation from the agent. The confirmation should include details of the amount that is paid, as well as documenting how the monies will be returned once the tenancy begins (if indeed the funds are due to be returned- sometimes they can be put towards the deposit). Please be aware, that if you choose not to move into the property, this fee may not be refunded.

The Inventory Report is a detailed record of the condition of the property prior to the tenant moving in, and is used as a basis to assess any damages at the end of the tenancy. With the introduction of the Tenancy Deposit Scheme, these reports have become more and more prevalent and it is common practise to charge the tenant for either the Inventory Report (carried out at the beginning of a tenancy) or the Check Out Report (at the end of the tenancy).

Finally, one should also be aware that the tenant might also be charged a renewal fee once the fixed term of their tenancy agreement ends. This is always worth checking prior to signing anything.

What A Tenant CANNOT be charged

It is a criminal offence for any agent to charge for the following:

1.    To register with the agent

2.    To show a list of available properties

Golden Rules

1.    Read everything.

2.    Don’t be afraid to ask questions- remember the agent needs you as much as you need them!

3.    Negotiate the lettings fees. If a property has been on the market for a while for example, there is no harm in asking the agent to cut their fees.

Complaints

Please visit the following sites for further information regarding making a complaint against an agent:

·      Advertising Standards Authority (http://www.asa.org.uk).

Complaints regarding the transparency of fees.

·      Trading Standards. Find your local office (https://www.gov.uk/find-local-trading-standards-office).

Complaints regarding any potential criminal activity by the agent.

·      Association of Residential Letting Agents (http://www.arla.co.uk/).

Complaints regarding any wrongdoing by the agent.

Property Pop: Comment: Armageddon

Property Pop: Comment: Armageddon: Interest rates likely to rise- aah!!  Call your parents and tell them you love them or kiss that photo of your lost love before tucking it...

Irony

The Government light a rocket under the property market to get house prices moving then ask the Bank of England to try and blow out the fuse just as the rocket is about to go into orbit!

Statistics for Tenancy Deposits

Statistics for Tenancy Deposits

Here’s a snapshot of statistics in relation to tenancy deposits:

·    There are £2.964 billion worth of deposits protected.

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·    Where a dispute has been lodged at the end of a tenancy*:

100% Deposit awarded to tenant                      29%

100% Deposit awarded to landlord                   15%

Deposit split between tenant and landlord        56%

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·    It is estimated that the compliance rate of deposits protected is 80.16%^

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·    A table of disputes as a % of number of deposits protected as at March 2013:

March 2008               0.05%

March 2009               0.52%

March 2010               1.08%

March 2011               0.82%

March 2012               0.85%

March 2013               0.92%

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Reasons given for the non-return of deposits:

	2007	2008	2009	2010	2011	2012
Cleaning	50%	52%	49%	47%	49%	52%
Damage	36%	45%	43%	39%	43%	45%
Decoration	18%	25%	26%	24%	25%	28%
Rent Arrears	22%	18%	16%	15%	16%	18%
Gardening	14%	13%	13%	12%	11%	12%
Other	47%	48%	50%	55%	55%	56%

* Data covers period April 2007 to September 2013

^ Government estimates- English Housing Survey 2011-12 DCLG (2013)

Angry Estate Agent

Number of Private Renters

I suppose it’s not a huge surprise, but it appears that since 2001, the number of those in privately rented accommodation has almost doubled.

According to figures from the Department of Communities and Local Government, those in privately rented accommodation had risen from 2.15 million people in 2001, to just over 4 million in the year 2011-12.

Interestingly, over the same period the number of those in social housing has actually remained rather static. In 2001, there were 4.23 million people, whilst in 2011-12 there were 4.03 million.

So what does this tell us?

Well, first and foremost, statistics are ridiculous. For example, working from these figures and taking the year 2006 as the baseline instead, I could equally have stated that the number of those renting social housing has risen from 3.91 million to 4.05 million in 2010-11.

And if I was Grand Duke von Twist II, an unelected figure of Parliament, being interviewed in a dimly lit television studio by a fierce bulldog of a presenter, and being pushed on my party’s manifesto pledge of increasing social housing- well, I would lean back into my chair, stroke my curly moustache rather smugly for a second or two, before declaring that these figures prove that there had indeed been an increase in the supply of social housing of almost 4% during our time in government.

I would then check my timepiece, pop it back into my waistcoat and tell the interviewer that I had to go on the grounds that as much as I would love to spend further time engaging the electorate, I actually had a previous engagement at my private members men club in Knightsbridge where there was a pressing game of backgammon in desperate need of attention.

I digress; though as the Grand Duke, I believe that I would be great at digressing. I’d like to think that I could steer a conversation seamlessly around the meandering maelstrom of how rubber is the perfect substitute for carrier pigeons to the relative merits of the humble shuttlecock.

Okay, I’m back.

It’s no real surprise that the number of those renting has increased over the last 10 years, and indeed, the trend will only continue upwards. Simple really; whilst the rate of increase in house prices outstrips that of salaries then it’s simple maths really.

My advice is- sell a kidney and buy a property. Failing that, steal a kidney and buy a property. Failing that, well, I suppose you’ll just have to come to terms with the fact that in all likelihood many of us will never realise the dream of home ownership. Ho hum…

In case you’re wondering, Grand Duke von Twist II says that if you want to own a house, maybe you think about working harder and having fewer children.

Comment: Armageddon

Interest rates likely to rise- aah!! 

Call your parents and tell them you love them or kiss that photo of your lost love before tucking it into your breast pocket or look into your pet's eyes and let them feel your devotion one final time (delete as appropriate). Then pack some canned meats and run to the hills. Find a small bushel or some fallen lumber, and hide like you've never hidden before.