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Almost four in ten agents anticipate revenue drop as tenant fee ban approaches-the rest can't do maths


sancho panza

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https://www.propertyindustryeye.com/almost-four-in-ten-agents-anticipate-revenue-drop-as-tenant-fee-ban-approaches/

Almost four in ten agents are expecting a drop in lettings revenue next year, Zoopla claims.

The figures come as agents face the prospect of the tenant fee ban being introduced during 2019.

Zoopla found that 38% of the 600 agents polled are anticipating a drop in lettings revenue, in part because of the fee ban but also over concerns about the number of rental properties coming to market.

Despite the concerns among agents, demand from tenants appears to be strong.

Zoopla’s State of the Property Nation report found that the number of tenants saying they are using letting agents to find a place to live has increased by 12 percentage points in the past year.

Almost half, 48% of tenants, used a letting agent to source accommodation this year, up from the 36% recorded in the 2017 edition of the report.

Of the 6,000 people surveyed for the report, 62% said they expect to rent for at least the next three years. Of these, 23% said they are likely to rent indefinitely.

Meanwhile, the proportion of home owners letting out properties rose from 2.4% in 2016 to 4.2% this year.

Charlie Bryant, managing director of Zoopla’s property division, said: “It’s certainly a challenging time for lettings agents with the ban on lettings fees looming. However, our research shows that demand for agents’ services and rented accommodation are strong, and that should come as a welcome boost.

“As the market becomes more regulated and complex, the lettings agents that adopt a more consultative approach with both their landlord and their tenant clients to help navigate them through will gain an advantage.”

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What is included in the fees? Is it just the initial on-boarding or is contract renewal part of that? My EA doubled the renewal this year to £100+VAT xD which really doesn't offer much protection for the tennent no matter how they try and spin it.

Seems to me the EA's have started to replace the income by trying to increase rents too. Now whether that's possible or not I have no idea. But those fees have been esclating and are pretty much pure profit for them so will be a big kick to their bottom line.

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That's a terrible article:

6 hours ago, sancho panza said:

https://www.propertyindustryeye.com/almost-four-in-ten-agents-anticipate-revenue-drop-as-tenant-fee-ban-approaches/

Almost four in ten agents are expecting a drop in lettings revenue next year, Zoopla claims.

The figures come as agents face the prospect of the tenant fee ban being introduced during 2019.

Zoopla found that 38% of the 600 agents polled are anticipating a drop in lettings revenue, in part because of the fee ban but also over concerns about the number of rental properties coming to market.

Despite the concerns among agents, demand from tenants appears to be strong.

Zoopla’s State of the Property Nation report found that the number of tenants saying they are using letting agents to find a place to live has increased by 12 percentage points in the past year.

Almost half, 48% of tenants, used a letting agent to source accommodation this year, up from the 36% recorded in the 2017 edition of the report.

Of the 6,000 people surveyed for the report, 62% said they expect to rent for at least the next three years. Of these, 23% said they are likely to rent indefinitely.

Meanwhile, the proportion of home owners letting out properties rose from 2.4% in 2016 to 4.2% this year.

Charlie Bryant, managing director of Zoopla’s property division, said: “It’s certainly a challenging time for lettings agents with the ban on lettings fees looming. However, our research shows that demand for agents’ services and rented accommodation are strong, and that should come as a welcome boost.

“As the market becomes more regulated and complex, the lettings agents that adopt a more consultative approach with both their landlord and their tenant clients to help navigate them through will gain an advantage.”

Tenants don't use letting agents to find a place.  Landlords use letting agents to find tenants.  If you're looking for a place to rent and you go to an agency, you're not expressing your rights as a consumer, you're going to the place where you find tenancies, to find a tenancy.   Sure, you can go elsewhere (ask in community, online places, noticeboards in the local shop, whatever), but I imagine that is relative small fry. In fact, I just don't get the figures -- half of tenants not using a letting agency?  I can only think that they're including people that get their lettings via the council, HA, etc, in their survey.

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1 hour ago, dgul said:

That's a terrible article:

Tenants don't use letting agents to find a place.  Landlords use letting agents to find tenants.  If you're looking for a place to rent and you go to an agency, you're not expressing your rights as a consumer, you're going to the place where you find tenancies, to find a tenancy.   Sure, you can go elsewhere (ask in community, online places, noticeboards in the local shop, whatever), but I imagine that is relative small fry. In fact, I just don't get the figures -- half of tenants not using a letting agency?  I can only think that they're including people that get their lettings via the council, HA, etc, in their survey.

Not really sure you've added much but a paragraph of semantics. Letting agents can't charge extortionate fees, flowery stuff aside, this is great news if you've been well and truly shafted by these shysters in the past.

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2 minutes ago, SillyBilly said:

Not really sure you've added much but a paragraph of semantics. Letting agents can't charge extortionate fees, flowery stuff aside, this is great news if you've been well and truly shafted by these shysters in the past.

Well, you're quite right -- it is just semantics.  But I don't like the implication that letting agency fees are a consequence of tenants taking advantage of the service the agents provide, rather than the agents taking advantage of those without any other choice, while not particularly impacting on their actual customer (the owner).

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11 minutes ago, SillyBilly said:

Not really sure you've added much but a paragraph of semantics. Letting agents can't charge extortionate fees, flowery stuff aside, this is great news if you've been well and truly shafted by these shysters in the past.

But they can and do, for now at least until 2019. Thats 3 years since the ban was proposed and I've still not seen clearly what will be included in that. Has it even been published?

We recently viewed a one bedroom apartment and the agents wanted £499 inc vat for onboarding and another £132 in advance for check-out. They weren't clear in the wording/who pays it but there was potentially another £79 for tenants liability insurance. They' weren't willing budge whatsoever so we never persued it further as we didn't need to move. The propertly did quickly go though so some poor sap(s) paid it.

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Most EAs will end 2019 blowing off tramps in the park for loose change.

Im serious.

As it stands, the EAs where ive some idea of cash - big listed ones and a couple of small ones where I know someone who works there - are seriously out of cash.

Low transactions are fucking over the selling commissions.

Ban on letting fees will see ~80% of their current cash go - poof!

 

 

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19 hours ago, SillyBilly said:

Not really sure you've added much but a paragraph of semantics. Letting agents can't charge extortionate fees, flowery stuff aside, this is great news if you've been well and truly shafted by these shysters in the past.

Bit harsh on shysters SB.....xD

They'll still be allowed to stuff the LL for 10% of his/her rent but the really outrageous £600 type sign ons will go the way of Countrywide-whop strangely,charged me and mrs P £600 once to sign once when we had to mvoe in a hurry.

It was noteworthy that they had purchased a vibrant local EA's lettings business and within a year went from having 30 places to let to having 4.Tenants with time rented via the cheaper EA's.

19 hours ago, dgul said:

Well, you're quite right -- it is just semantics.  But I don't like the implication that letting agency fees are a consequence of tenants taking advantage of the service the agents provide, rather than the agents taking advantage of those without any other choice, while not particularly impacting on their actual customer (the owner).

The article was written by EA central.I go there to read the comments.The delusion still runs deep eg 'over time High St EA's who deliver great service will still be able to cahrge 1% and will see off the fixed price online competition...'   etc etc etc.................I feel good when I read them.

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I'm glad that Letting Agent fees are on their way out. They should not be getting paid twice for their services. Hope the greedy bastards feel the pinch.

Yes, they can try and up the rents to compensate. Surely this will help make things a little more transparent for tenants when comparing rental costs between shortlisted properties and will ultimately be subject to market forces.

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On 11/12/2018 at 20:23, A_P said:

But they can and do, for now at least until 2019. Thats 3 years since the ban was proposed and I've still not seen clearly what will be included in that. Has it even been published?

We recently viewed a one bedroom apartment and the agents wanted £499 inc vat for onboarding and another £132 in advance for check-out. They weren't clear in the wording/who pays it but there was potentially another £79 for tenants liability insurance. They' weren't willing budge whatsoever so we never persued it further as we didn't need to move. The propertly did quickly go though so some poor sap(s) paid it.

The bill is still going between Commons and Lords so subject to change but yes the details have been published. It’s basically what it says on the tin. Agents cannot charge fees to tenants. The exception will be a couple of ‘default fees’ which are permissible, namely for replacement of a lost key and a charge for late payment of rent. The bill will also cap deposits at five weeks rent.

The details are still being ironed out but the direction of travel is in favour of the tenant with some loopholes having been closed when it went back to the Lords last week.

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