A so-called ethical lettings agency run jointly by two local authorities is handling private rental properties but is charging landlords just 6.0 per cent plus VAT for what it calls “a professional management service” - far below the local norm.
SeaMoor Lettings is run by South Hams and West Devon councils, and has just launched a new website in a bid to woo private landlord clients.
Some 32 landlords currently use the service, with 36 homes let through SeaMoor Lettings across the two council areas - each of which has significant numbers of second homes and Airbnb short lets, while also having substantial local authority waiting lists.
SeaMoor Lettings also offers a six-week rent and deposit guarantee.
However, the downsides for the landlords is that the agency decides the tenants and urges landlords to charge a lower monthly rent because of the low management fee.
The service from the agency includes tenant selection, credit checks and referencing; preparing tenancy agreements and associated legal documents; quarterly management inspections including all outdoor spaces; a six week rent and damage deposit guarantee; a 100 per cent guarantee of the rent when the property is empty up to a maximum two months; the payment of all utility bills; rent account management; a comprehensive inventory; and access for landlords to affordable finance packages for property improvements>
Councillor Judy Pearce of South Hams council says: "We're facing a huge housing crisis and we need action right now before more people are forced to move away. Big problems need innovative solutions and together with West Devon we're one of the only councils in the UK to offer an ethical lettings service to get the private rental market to deliver more affordable rental rates.
"Just like opting for ethical banking, SeaMoor Lettings gives landlords the choice to manage their property investment ethically too. Please do take a look at our new website and join our ethical lettings revolution. You'll help families and people who are not already on the housing ladder to stay living close to their schools and workplaces and help our communities to thrive.”
And Barry Ratcliffe of West Devon council adds: “Local rents have spiralled out of the reach of many local people including those doing some of the most essential jobs in our communities, such as care support workers. It means that some people on lower wages have to move out of the area. As a result, there is a local shortage of people available to work in these important roles, including care, retail and hospitality.
"I appeal to anyone who has a property they rent out in West Devon to get in touch, By joining us, you will be helping to make sure these local people serving their community can still afford to live here and provide us with the services we need - together we can help our communities to thrive."
There is no salary cap to be eligible to rent a property. However priority will always be given to households with lower incomes.
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There's nothing ethical about it. If anything, you could argue that it's poor ethics for councils to use tax payers money to go into competition with industries that have a hand in funding them. Especially when you can bet your life that they won't be held to the same levels of accountability. No investor worth their salt would get involved with this, it's just asking for trouble.
Absolute No
A business that will be funded by tax payers to undercut hard working agents already abused by the no fees system. When the funding runs out you will have low grade unsupported tenants that yes you will be supporting
Hmmmm. "Let your property through us, we will guarantee you get a much lower rent and still charge you for doing so.." Can spot a flaw in the sales pitch here. I love it when people get ethical with other peoples money.
They probably have Diane Abbott at the helm
Six week’s rent and deposit. So that is less than two week’s rent as a deposit, unless they are working on a 8 day cycle. I almost feel sorry for the 32 landlords who have, it would appear, not hear of “if you sup with the devil, you need a long spoon”.
So- quoting fees as 6%+VAT rather than 7.2% is their first breach of compliance.....
This article quotes 100% rent cover for voids of up to 2 months- their info says 50%....
No mention for ombudsman membership, CMP or ICO registration (as this is a separate entity)......
Anyone else want to add some more?
I have had terrible experiences with Councils over the years. I find it very hard to trust them. Basically they will unload a bad tenant on you and sod off ! Looking at it ralistically the council is going to charge you for taking their tenants off their hands !
I have had two experiences with two different councils. I have learned the truth of the saying, "Fool me once, shame on you. Fool me twice, shame on me".
We have a social lettings agency in Northampton that's been going for 5 years. It has managed to list 3 properties in that time and has cost the taxpayer roughly £1.5m so far. What particularly amuses me is a local councillor saying "it must not be allowed to fail" - she clearly deems what's gone on already as worth continuing with! Google West Northamptonshire Social Lettings Agency for the BBC article on it - I can't paste a link here.
Interesting that there are no liabilities for utilities. I wonder if that includes council tax? I it does, then one council department will be paying another, or in practice the council taxpayers will be paying as usual.
Even stranger, it was a Conservative council that set this up.
Councils often evict tenants but keep shtum about it, hoping to catch the unwary private landlord. Highly likely you will find that these are the type of tenants they want you to take off their hands,for a fee of course !
There is nothing ethical about this, it is a clear conflict of interest with taxpayers money
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