A ban on tenant fees looms and as an agent I won’t be shedding tears. It’s been coming for a while.
Not that I couldn’t justify the charges we made as fair and reasonable.
We work hard with viewings and making sure tenants have a good service and I considered it fair that the tenants cover some of the conveyancing costs for a property (like people do when buying) but we have to deal with the reality of the situation.
In truth the fees cover costs and those costs will have to be found somewhere. As the income source landlords may have to face increased fees as an element of these costs in the future. However personally for Belvoir Uxbridge I think that as a growing business we can be optimistic on being able to to carry on growing without changes to pricing.
But for other agents how in turn do landlords recover their costs which they need to do? Inevitably this will be from rent increases in the future.
However whether they can pass that desire for increased rents on to tenants will depend on those twin economic pillars of supply and demand. But it is interesting to look at what happened in Scotland.
How will this affect Rents in future?
In Scotland, rents have risen according the CityLets Index (which only covers Scotland) by 15.3% between Q2 2012 and today… interesting when you compare the same time frame (using ONS figures which don’t cover Scotland) between 2012 and 2016
Rent Rises By Region since Q2 2012
As always with statistics you can take your numbers from different places and get a different result. Shelter and ONS think that rent increases weren’t seen.
But having talked to agents in Scotland they certainly felt that rents had risen with the exception of areas hit by economic downturns so as those linked to the oil business recently.
Invest in a strong area (like we are in West London in my opinion) and the long term remains positive.
Rents are rising naturally but frequently by less than inflation so the tenants won’t be getting a bad deal!
Will Some Agents Still Charge Tenant Fees?
I understand around 10% of agents in Scotland are still implementing tenant fees in one way or another.
My attitude is the law is the law and we will comply with the spirit and the letter.
Parting Thoughts
This is not a change that will happen immediately so agents and landlords will have time to consider and react accordingly. Or possibly not react at all.
For tenants there is now an even bigger incentive to go with a reputable agency rather than risk a landlord for whom they have little or no redress. As a member of the community your local estate agent and letting agent has ‘skin in the game’ through damaged reputation, which a small landlord avoids.
I expect letting agents to even more put an emphasis on the reliability of the tenants they will find and vet professionally.
Despite this change I remain very positive about lettings, Buy To Let for myself as an agent, for my landlord customers and our tenants.
