The issue of letting agent fees is back. And this time, it’s even more serious. With a ban already in place in Scotland, and the Welsh government being heavily lobbied to abolish letting agent fees, many have been wondering if England is going to be next. This year we’ve heard increasingly loud calls from tenant-focused organisations for an outright ban on letting agent fees. In their latest report, the Citizens Advice Bureau reported some tenants were being charged fees reportedly as high as £700.

Clearly, £700 is excessive and not typical of the average fee charged. The challenge is that media reports like this do no favours for the professional agents who work very hard to adhere to the many rules and requirements of setting up a tenancy, providing a service worth paying for.

We were worried. It felt as though public opinion was turning, and with that, Government’s direction of travel could follow with an outright ban. Was our industry sleepwalking towards fees being banned in England? At NALS we thought so. So, we decided to act.

WHAT NALS PROPOSES

We propose a cap on the fees agents charge tenants, rather than a ban – as a fair alternative for both letting agents and tenants. This would ensure agents were paid for their work, while tenants were able to see they were paying a reasonable fee, capped at a local level, to accurately reflect the market.

When asked about a ban on tenant fees, many agents worried that a ban would put them out of business. More worrying is that 32% hadn’t even thought about it.

We’ve been speaking to industry about our plan, urging people to get behind us; to Government, to tenant groups and to the media, but what we really needed to know was what our agents thought.

We asked 1,000 of our agents based in England their thoughts on fees, what they were charging, and if they would agree to a cap in their fees, as opposed to an outright ban.

98 per cent of agents who responded are charging fees, with 67 per cent charging a flat fee. This would fit well with a cap model – should it go ahead. Most importantly, a resounding 84 per cent of respondents said yes, they would be in favour of a cap.

AVERAGE FEES: THE TRUTH

Interestingly, but perhaps not surprisingly, was that despite the excessive fees often mentioned in the press, NALS’ research shows that, on average, the fees letting agents charge per tenant were £172 – significantly below the national average of £233 reported in the English Survey of Housing.

When questioned about what impact abolishing fees would have, many worried that that a ban would put them out of business completely, particularly for smaller, independent firms. Agents were concerned they would have to make staff redundant, and they would be unable to cover business costs, while many believe it would impact on service. Respondents felt that they were already charging a fair fee for the work they do – not an excessive one.

However, 32 per cent of agents admitted they hadn’t yet considered the impact a ban on fees would have on their business. Perhaps more worryingly, our research revealed that, for some agents, the fees charged make up a significant proportion of their annual turnover. Of course we can’t be certain what will happen, but if you are relying heavily on fees this is very much the time to reassess your business model, and put plans in place to shore up your business in the event of changes to the fees you are able to charge. We are here to help.

THE RIGHT SOLUTION

We all know that a great deal of time and cost is involved in setting up a tenancy, and agents – like any business – should be allowed to reasonably charge for the work they do. Added to that, access to all types of housing tenures comes with a fee and renting in the private rented sector is no different. We’ll continue to make those points. NALS wants to make renting safer and fairer for everyone. We’re working hard to explain to consumers the amount of work actually involved in setting up a tenancy, and you can go to the

NALS website to download a PDF of “What’s involved in setting up a tenancy” to show to tenants.

Our research shows the majority of agents in England are not charging excessive fees – but if they are, we want to see this stamped out. This is why we believe a cap is the best solution for both tenants and agents.

If you’d like to find out more, or support our campaign, please get in touch: [email protected]