Agents to suffer if ban on tenant fees are implemented – iConn Property Managment, Canterbury
Another interesting read from Property Industry Eye:
Eric Walker, managing director of Northwood, was scathing about Labour’s proposals, including the pledge to make it illegal for agents to charge fees to tenants.
He said some agents would not be able to survive such a move. “Contrary to the universal misconception that agents are raking it in, many make small profits indeed and this policy may push some over the edge.”
He went on: “If agents are forced to scrap fees from tenants, then inevitably, landlords will end up paying more which in turn could increase the rent the tenant pays.
“Couple this with the proposed draconian rent-capping idea, then of course some landlords will reconsider their position.
“It is of sinister concern that rent caps would be introduced at a time interest rates are predicted to rise, which spells disaster for many landlords.
“The lettings market is fine. It’s regulation and consumer protection which should be Miliband’s priority, not State controlled pricing.”
Carole Charge, director at lettings chain Leaders, said: “Labour’s three-year tenancy proposals are unrealistic. Without the right to regain repossession of their property, most investment landlords would not take the risk and pull their property from the market.
“The picture painted by Labour of tenants being forced out of their homes is not accurate. Reliable statistics show that the majority of tenancies are ended by the tenant rather than the landlord.”
Dorian Gonsalves, director of franchising at Belvoir, said his firm would be “dead against” the changes proposed.
“The existing Assured Shorthold Tenancy agreement can already run for a longer period, and changes to this could have a devastating effect on the supply of available rental properties.
“Ultimately, tenants would bear the brunt of fewer rental properties, higher rents and no alternative housing solution being provided by the Government.
“Experts have warned of the dangers of making changes to the existing AST or forcing landlords out of the market, which clearly some of these proposed changes by a Labour Government are likely to do.
“Tenants already have the choice of not paying letting agent fees. They can rent privately and this may be attractive to those tenants who prefer a lower standard of service, with no consumer redress and a landlord who may or may not respond to maintenance issues.”
Carol Pawsey, lettings director at Kinleigh Folkard & Hayward, described Labour’s proposals as “disastrous”. She warned that rent caps could lead to “many” landlords quitting the market.
The National Landlords Association said the proposals were “completely unworkable”.
Richard Lambert, its chief executive, said: “Were they to become government policy it would strike a devastating blow to investment in housing of all tenures and further constrain supply at a time of real housing crisis.”
The Residential Landlords Association said Labour had quite simply got it wrong. Vice-chairman Chris Town said: “All the evidence clearly shows that rent controls of the kind proposed would critically undermine investment in new homes to rent and are not needed, given that official statistics show rents increasing by much less than inflation.”
The British Property Federation also savaged the rent controls proposal. Director of policy Ian Fletcher said: “It makes no sense.
“Good landlords will be getting a perverse message that if you are providing a premium product the most you can expect is the ‘average’, whilst bad landlords with sub-standard accommodation can find another justification for charging over the odds.”
Source: Written by Rosalind Renshaw on behalf of Property Industry Eye http://www.propertyindustryeye.com/ban-fees-tenants-kill-agents-warning/