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Richlist

June 1st Approaches

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The date of June 1st rapidly approaches.

From that date landlords.....who use Lettings Agents......will either be increasing rents on new lettings or paying increases fees. Rents are about to rise significantly from. June 1st.

I'm in the process of advertising a1 bed flat to rent......in a week's time, if we do not find a tenant the rent asked will go up.

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It will be interesting to see what happens RL.  Fortunately it won't affect me right now.

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Well, June 1st has been and gone and I have just relet a property last Saturday.

No fees now for the tenants so my bill from my agents went up by a few hundred pounds......ouch. However, I did manage to increase the rent by £900 a year.......which makes me quids in.

Perhaps this new ' no tenant fees' is a blessing in disguise.

Amazingly of the 12 or so applications i received from my own advertising not a single person knew of the rule changes.

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Well I have nearly completed all my fee increases to my landlords (about 4% left to do)  and only 2 kicked off who were only  one property owners. One I had to reduce the increase by a bit and the other grudgingly accepted it. When the last few are done I will be a few quid up.

The landlords who I thought would moan didnt, I guess it amounts to how you present it to them. 

A handful of tenants are questioning the fee charge which carries on for a further 12 months on renewals so we will get the overlap of the fee increase and tenant fees for a year on renewals.

The admin for setting up new tenancies is a bit easier without fees to take and chase up. Also a few tenants have given notice which I suspect is because they were waiting for the fee ban to kick in first.

Rents have definitely gone up and will be trickling through as and when contracts come to a end.

In summery I think in general tenants will pay more in rent but maybe a little bit better off as the landlord will swallow a bit of the cost.

 

  

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In general I agree with your summary but, I'd go a little further.

It's good to know you are making a bit more profit out of this change and that your admin workload is reduced. Some landlords, at least those with a business head, will recognise as I do that it's only right that agents pass on some of the tenants fees. You have a right to make a profit like everyone else and we should recognise that we need each other for the business to work. But there's more to it than that....... I also think you may find business volume will increase.

There are tenants who won't go through an agent because they know they won't pass credit & reference checks.....but there are also those tenants who, in the past, wouldn't go through an agent because they didn't want to pay the fees. Now there aren't any fees for them there seems little point in them looking on Gumtree et al. Going with an agent gives the tenant much more security, peace of mind, avoids the landlords that don't care, don't comply with legislation and don't do any of the stuff that they should do. Once that message gets out, more tenants will use an agent.

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Possibly, but any tenant who applies still has to fill in a application form and any questionable tenant who answers honestly wont get any further and a credit check wont be needed. If they lie they will them have to put down a holding deposit and if the following checks highlight the lies on the application form they then potentially lose their holding deposit.

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What I'm suggesting is that I don't think tenants with a poor credit history or poor references are any more likely to apply now than they were before June 1st.

But......those tenants who were just not prepared to pay the agents fees.......and I see a lot of them......may well now use an agent in the future.

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Can't say i seen the rents change much in the Luton area as yet but i do use an Agent. I am letting a new property soon hopefully and been told the standard charge for finding and placing a person is 2 weeks rental cost.

By the way should i write something into the tenancy agreement around year rental increases per year of min 2% or greater if inflation is higher or interest rate changes etc?

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But the cost of re letting a property is not just the agents fee......Let's break it down .....

Agents set up fee.

References.

Tenancy Agreement.

Deposit protection.

Homelet rent guarantee insurance.

VAT.

Inventory and schedule of condition.

Setting up standing order.

Arranging EPC.

Supplying 'How to Rent' booklet.

Legionella information sheet.

Smoke alarm check sheet.

Template for reporting repairs.

Supplying instruction books.

Supplying list of leasehold restrictions.

etc etc.

rents in my area have risen by around £75 a month to compensate for increased agent set up fees.

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Thanks Richlist,

 

will keep this in mind and also make a note to discuss all these points with the Agent on refurb and pre-letting stage.

I note you mentioned the EPC, that does stay valid for 10 years right or have to redo this on letting each time again?

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It's valid for 10 years subject to major works.

My list is only the legal requirements it doesn't include the long additional list of items recommended by many on this forum.

That's why using an agent won't necessarily mean you'll get a proper job done.

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