Shelter confirms it wants change in law to stop agent fees to tenants

When agent David Baker wrote to Shelter over its campaign to end letting agent fees charged to tenants, he was not expecting a response.

However, he got one.

And the response confirms that Shelter is not simply going after transparency of fees, but a fundamental change in the law, in the shape of primary legislation.

This differs from Scotland, where Shelter has been successful in banning letting agent fees where the move only required a tightening up of existing legislation.

Here is the full exchange:

Dear Shelter,

I am writing in connection with your campaign to end letting agency fees.

As a reputable and licensed member of ARLA, I am extremely disappointed with your campaign. Even more so having attended the National ARLA Conference in March of this year and witnessing Campbell Robb, Shelter’s chief executive, confirming that he wasn’t necessarily against fees, just agents not being transparent about them.

I believe it is important that you are aware of the service we provide to our tenants. It’s not just about referencing!

When a tenant rents a property through us they can be assured that the property meets the required standard, is safe, and that all legislation has been adhered to. If a tenant has a burst pipe at 3 o’clock in the morning then there is a number they can call for emergency assistance, so that they are not inconvenienced. If they lock themselves out of their property on a Saturday evening, often a member of my staff will meet them with office keys, saving them the cost of a locksmith.

We charge a one-off fee of £195 plus VAT for a single person tenancy with no renewal fees. Our tenancy feedback forms rate our service as excellent (68 tenants recently surveyed).

Based on the above, I believe that our fees are fair and reasonable, and more importantly justifiable.

In order to run a successful and efficient business costs money. If your campaign proves successful then rents will rise, forcing us to recoup costs somehow, and costing tenants more in the long run.

Buy-to-let landlords are proving vital in supplying accommodation to an ever increasing population. Your campaign does not take this into account. Penalising agents/landlords is not the way forward.

By all means insist on transparency, push the Government for mandatory licensing of agents, but please do not penalise the hardworking, ethical and professional agents.


And the reply:

Dear Mr Baker,
 
Thank you for email concerning the launch of our campaign to reform the lettings market. We appreciate you taking the time to outline your views.

Whilst our two organisations take differing views on the issue of fees we, like ARLA, have worked tirelessly to encourage the government to extend the legislation that applies to estate agents to letting agencies, to help improve the standards across the industry, and help protect landlords and renters when something goes wrong.

We will continue to work with industry bodies to ensure wider reforms are introduced to improve standards and professionalism across the lettings market. Campbell attended the ARLA conference prior to the launch of our campaign. During his speech he did not rule out any measures or state what our position would and wouldn’t be, as our position had yet to be confirmed.

Our position is based on a range of extensive pieces of research, including surveys conducted with landlords and tenants (gathering experiences from over 4,000 renters and 1,000 landlords), mystery shopping, interviews with letting agencies (both large and small), as well as analysis of the Scottish market. Our evidence demonstrates that letting agencies are charging fees of varying amounts, with one in seven renters using a letting agency charged more than £500.

These fees are on top of the commission charged to landlords, many of whom are unaware that their tenant is also paying tenancy set-up costs. In addition to the support we’ve had from the public, we have had support from landlords (large and small), some letting agencies and some credit checking companies.

Our campaign recognises that any end to letting fees to renters would require primary legislation, in which there would be a consultation period to determine the parameters of any ban, and the process of implementation. We do not anticipate “in tenancy” fees like a call out charge for lost keys being included in any such ban.

We believe our proposals are both fair and workable, as demonstrated in Scotland where the ending of fees has not resulted in rent rises nor led to closures of letting agencies.

You can read more information about our campaign and the evidence we gathered in our online FAQ:

http://shltr.org.uk/44h

Antonia Bance
Head of Campaigns