So you might not know but there’s been a big change in the lettings market, especially effecting letting agents. The government from the 1st Jun 2019 have banned all lettings fees and amended the amount of deposit you can take from a tenant with severe penalties if you don’t comply.
So let’s deal with the particulars to see if they effect you?
Deposits are now capped at 5 weeks rent – anymore means you could be liable for a fine
When finding a new tenant you can’t charge any fees for vetting the tenant, drawing up the tenancy etc.
You can take one weeks rent as a holding deposit, to reserve a tenancy during the vetting process but can only retain this for 15 days unless you mutually agree to a longer period
The holding deposit can be retained in specific circumstances such as the prospective tenant providing misleading information etc.
In tenancy default fees such as late payment fees, missed tradesman appointment fees are banned – the only ones of note you can still charge for are for a change of tenancy (£50) and for new keys (at cost)
On more a positive note there are transitional provisions for tenancies signed prior to 1 Jun 2019 – you can still charge default fees within your tenancy agreements for a year until 31 May 2020.
Also really importantly since I don’t want anyone to get into trouble – the maximum penalty for a first offence is £5,000 and £30,000 for subsequent offences. So please, please make sure you either have a letting agent who is aware of this or if you self manage take note.
So how does this effect letting agents? Well if you’re with another letting agent you might have had a letter through the door saying your FEES are increasing. These changes are typically costing letting agents 15-30% of their income so they’re desperate for money right now. Also they might have to cut staff and your service to save money.
So what are we doing? Well over the past year we’ve done lots of things to insulate ourselves – looked for cost savings, found new revenue streams (selling buy to lets) etc. So hopefully, fingers crossed we’re not looking to increase fees.
I feel with the recent tax changes to buy to let, landlords are being hit hard enough so we’re going to hold fees. As Jeff Bezo’s of Amazon likes to say:
“There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second.”
So if you’re in the situation where your current agent has increased your fees or if you’re not satisfied with a reduced service give me a bell – and we’ll see if we can help to save you money?