I thought about it for a long time especially as a new business, every penny had to count, but the decision came down to 3 key points.
1 – Working in the county town of Stafford and spending weekends in Stoke on Trent homelessness is a ‘real’ problem which I can see on the streets. While I can be honest enough to say I don’t have the skill set to help the homeless find accommodation and deal with the larger issues that surround why they are on the streets, I can feel compassion for their situation.
2 – Affordability is a key issue facing the private rented sector. Lets take the average dental nurse earning roughly £15,000 per annum. Their affordability, as dictated by the referencing company means they can afford a rent of £475 per calendar month. Renting alone they need to find 1 months rent, a deposit and possibly £300+ of tenant fees before they can move. This has the potential to be more than their monthly wage without council tax, utility bills, food, petrol etc on top.
3 – Have landlords suffered at the hands of letting agents? Landlords have in the long running debate about housing often been wrongly vilified for being greedy money grabbing entrepreneurs. The truth is that landlords are filling a much needed gap in the housing market that social housing just can’t fill. My stance is that the tenant fee ban could be an opportunity for landlords to level the playing field and hold their agent to account.
Check the following list of charges which are sometimes made to landlord and tenant by agents*. These are often worded differently but you may be able to see the common thread.
Landlords fees apply to Tenants fees apply to
Process tenancy applications through a referencing agency // Full referencing checks including affordability, employer & landlord
Check Right to Rent Status // Identity and immigration status check
Arrange an inventory prior to tenancy // Allocation of a professional inventory
Preparation of the tenancy agreement // Organisation of the tenancy agreement
Inventory check in with the tenant at the property // Conducting a check in at the property
Completing the end of tenancy inspection // Independent outgoing inspection
Many landlords are genuinely not aware of the level of fees agents are charging!
A landlord has to ask what is he paying the agent for, if the tenant is also paying? With both landlord and tenant paying fees an agent can make twice as much money from 1 let. This is where the problem will lie for most letting agent with the eradication of fees.
The predicted end result?
After the tenant fee ban in Scotland the media are hyping that the tenant fee ban in the UK will see landlord fees increase from letting agents and a direct result may well be an increase in rents to compensate. Either way tenant and landlord apparently lose out again. But what about the agents?
We decided to take a different, fairer view.
We are providing a service to the landlord as the customer for which they need to pay a fee. Not an extortionate amount, fair amount based on the work we will do.
Landlords should not suffer a price increase because agents’ revenue will fall and so we will not impose one.
Tenants should not have to plug an agents’ shortfall in income, by paying exaggerated fees.
Agents may add commission on to contractors’ invoices to build additional income. While they can do this, they should declare it to you. We don’t do this!
Many who rally against the ban are advocates of increasing revenue through additional charges and tariffs to landlords. Our charges are set out and transparent, they are also
not going to increase when the ban comes in to force.
As Staffordshire’s property experts, Dourish and Day pride ourselves on treating customers as individuals not transactions. We strive to;
-Stand above all other estate agents in service to our clients, acting with their interests at heart – not our own
-Sensitively offer independent, professional advice whilst achieving the very best results
-Maintain our well-justified reputation for uncompromising honesty and integrity'
*Not all agents do this, some charge only for credit checks, some for paperwork and some for the full service. We’d always advise you check with your current agent on the level of fees charged to tenants.