In June, the Department for Communities and Local Government launched a new guide for private rented sector tenants titled How to rent: the checklist for renting in England. With this guide the government want to give the country’s 9 million tenants access to understandable information for renting property in England.
Eric Walker is Managing Director of Northwood UK and tweets at @justericwalker
We in the property industry have more common ground with the likes of Generation Rent and Shelter than many would think. Professional agents do an immense job and provide a valuable service to help protect consumers from the small minority of rogue agents. MPs call for regulation every day, yet the only group which can change the law is in fact the politicians who refuse to do so.
This Government wants agents to regulate themselves. Their reason is in no small part due to the horrors which would be uncovered if agents were forced to regulate. Clients' money should be held in a ‘ring-fenced’ client account, but while this may protect money from creditors, it is not ring-fenced from the agent. If their business is struggling, there is little point in seeking bank assistance and as such, clients' money is a very tempting resource.
Nearly half of private renters feel they have been ripped off by their landlord or letting agent, according to a poll commissioned by Ocean Finance (reported by Mortgage Introducer).
The biggest problem, cited by around half of unhappy renters, was the delay - or, indeed, complete failure - to get repairs carried out. This was followed by withholding of the deposit at the end of the tenancy (37%), or making unreasonable deductions from it (25%). Unreasonable rent rises and rip-off admin fees at the start of the tenancy affected around 23% of respondents.
These findings support work Generation Rent is already doing to improve the lives of renters. Only yesterday we published a consultation on new ways to help tenants recover their deposits.
We are also calling on politicians to strengthen tenants' rights when requesting repairs by protecting them from revenge evictions. Our proposals for a long term tenancy would ensure that landlords couldn't impose inflation-busting rent increases, while we argue that letting agents - who work for landlords - should not be able to pass on fees to tenants. Further information is in our Renters Manifesto.
Yesterday I was asked a surprisingly difficult question. I was asked what I thought of charities and local authorities setting up "ethical" letting agencies. The fact is I haven't given huge amounts of thought to it - though our office is maintaining a watching brief on their activities and seeing what can be learnt.
So I had to retreat to an instinctive (and unpopular) no. It seems inconceivably that the state or non-profit sector could or should compete in this space cost effectively. We're glad they do so as they are a rare respite for people who are routinely exploited, but on being scrutinised on the issue, I just couldn't see how they could be scaled to have a beneficial impact for millions of people.
I have had a think now, and while I did so fully prepared to explain why I had been wrong and have changed my mind, I haven't. I really don't think such projects are a solution to the letting agency problem. But as a representative of a tenant advocacy group, this does bear some explaining.Read more
We've had a number of requests to publish the list of how MPs voted in the failed bid to outlaw letting agent fees to tenants. You can see the full list here.
This campaign isn't dead though. We'll be working with enlightened Peers to bring this back in the Lords. Unlike MPs, Lords don't get their letting agent fees paid on expenses so we're expecting more support.
The Government yesterday backed letting agents over renters by refusing to ban fees to tenants. In voting on the Consumer Rights Bill, Conservative and LibDem whips defeated the ban 281 to 228. The Government instead promised new fines for agents who don’t publish their fee tariff.Read more
Supply and demand.
Oh you wanted more than that? Ok.
There is short supply and high demand for homes to rent. The balance between these forms a price that a tenant is willing to pay a landlord. So far not controversial.
However, that is not how the relationship between tenant and agent is characterised. At the time of signing a contract, the agent is the gatekeeper to a single home with any number of keen tenants. The agent is not an actor in the market for homes to rent but a creator of micro-monopolies for single homes.Read more