Archive for the ‘lettings legislation’ Category

Like many Letting Agents this morning I want to scream out in frustration at the unhelpful and sensational news articles that the likes of the BBC are streaming.

Letting Agents fees have not been banned. Yet.

Letting Agents fees to tenants will continue until legislation is passed. There will be a consultation before this happens. This will take time.

The whole thing has come about in the first place because of greedy agents charging a fortune.

Once again the  unscrupulous actions of the few is having a disproportionate affect on the reputations of many.

I know locally a letting agent (no names mentioned but sounds like an unpopular scavenging animal at the start) who charged over £750 in upfront tenant fees for the agent and for the life of me I cant see how that is fair!  Yet most of us agents charge simply 50% of the cost of the tenancy agreement, the cost of the references and a small administration fee. Most reputable agency charge between £200 – £300 plus VAT to cover this.

It will hurt responsible letting agents to loose this fee. Why? Because the cost of referencing is a genuine cost, as is our time in drawing up tenancy agreements. The costs of running a company mean that this cost will have to be placed onto the Landlord and most landlords will put up the rental.

Phillip Hammond has confirmed plans (and note these are plans, not legislation implemented from today!) to ban letting agents’ fees to tenants in England. The details of this important announcement are still very unclear but the Department for Communities and Local Government (DCLG) will consult with ARLA and other associations ahead of bringing forward legislation.

This industry does not need a BAN – it needs a regulatory cap. 

“So now is the time to speak out” 

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Sally Asling from Surrey Letting Agent, SurreyLets, answer to this heading is “Its time for all agents and all Landlords to use their voice and to speak up but until there is a consultation and until there is an outcome, its business as normal”

“Following today’s Autumn Statement the Chancellor of the Exchequer, Phillip Hammond has confirmed plans  (and note these are plans, not legislation implemented from today!) to ban letting agents’ fees to tenants in England. The details of this important announcement are still very unclear but the Department for Communities and Local Government (DCLG) will consult with ARLA and other associations ahead of bringing forward legislation.So now is the time to speak out”

“The banning of fees will end up hurting the most, the very people the government intends on helping the most.”

Asling continues  “The Letting agents fees should not be abolished, but I agree they need regulating. Some agents charge ridiculous fees, but most agents like ourselves charge a nominal fee for a service. Our tenants pay to be references, they pay 50% of the Tenancy Agreement and a small administration fee and all of this is normally capped at £300.00 per tenancy. I don’t know what service in life you get for “free”, from lending arrangement fees, car hire fees and even banking fees. If these fees are abolished they will be passed directly to a Landlord without question and I know this will impact what the landlord needs to charge through rental increases to make it a viable option. Landlords are not charities, they are investors. Without Landlords in the Private Rental Sector this country has a deeply dire and worsened Housing Crisis – yet instead of the government helping resolve the problem a supply of housing, it is driving Landlords out of buying to let, increasing the number of empty homes and hurting those it is trying to help”

The following article has been taken from the ARLA News Board.

Since the announcement ARLA MD, David Cox has spoken with DCLG who have confirmed that a consultation on banning letting agents’ fees will be launched in the New Year. Details of what the consultation will contain have not been finalised and the Government has asked for ARLA to bring forward the industry’s views. DCLG also confirmed that this will require primary legislation through an Act of Parliament. This will give agents time to plan for the ban to come into force; in whatever form it takes.

So Landlords and Agents please have your say here!

ARLA is extremely disappointed that this announcement has been made without a strong basis of evidence. We’re asking the Chancellor and the Housing Minister for a meeting at the earliest opportunity in order to ensure that they fully understand the damage that this will cause to housing standards and the impact it will have on the cost of renting.

We need the Government to explain why measures have been brought forward without prior consultation which undermine the work that we and other partners are doing as part of the DCLG Affordability and Security Working Group.We do not believe that these measures will tackle rogue landlords who will continue to operate outside the existing boundaries of housing legislation.

On news of this announcement there are a significant number of common concerns – most notably the loss of income to support the vital services that Letting Agents provide. This includes the increased legislation, the burden of which has grown significantly over the last 18 months, with little to no investment in policing these new laws.

Commenting on the decision to ban letting fees to tenants ARLA Managing Director, David Cox said:

“A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market. It will be the fourth assault on the sector in just over a year, and do little to help cash poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account.

Most letting agents do not profit from fees. Our research shows that the average fee charged by ARLA Licenced agents is £202 per tenant, which we think is fair, reasonable and far from exploitative for the service tenants receive.”

“These costs enable agents to carry out various critical checks on tenants before letting a property. If fees are banned, these costs will be passed on to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents.

“The banning of fees will end up hurting the most, the very people the government intends on helping the most.

We are telling our members to continue with business as usual. When the consultation is launched, the industry must present a united voice and all agents need to work with ARLA to make our collective views heard at the very highest levels of government.

We welcome your views on this announcement to help support and inform the arguments that we are making in the media. To make your views known please email communications@arla.co.uk

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epc2
There are new changes coming into force for Landlords with regard to the EPC rating of a property.

 

As from the 1st April 2018 there will be a requirement for any properties rented out in the private rented sector to normally have a minimum energy performance rating of E on an Energy Performance Certificate (EPC). The regulations will come into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies on 1st April 2020. It will be unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption. A civil penalty of up to £4,000 will be imposed for breaches.

Poor energy rating is classed as those EPCs with F and G ratings

There are separate regulations effective from 1st April 2016 under which a tenant can apply for consent to carry out energy efficiency improvements in privately rented properties. Click here for this Guide.

SurreyLets like all letting agents need to have a copy of the properties EPC to market a property. These new guidelines will start affecting rental values. Sally Asling, Lettings director at SurreyLets states “Its clear that over time the rentable value of the property will be affected by the EPC rating. We are not there yet, but as consumers become more aware of impact of the EPC rating, lower rated properties will find tenants negotiating on the rental to compensate them the difference in energy savings that a higher rated property would provide”

The Regulations apply to domestic private rented sector properties in England and Wales to all properties let on an AST agreement  (Assured Shorthold Agreement)

Prohibition on letting
A domestic private rented sector property is substandard if the EPC rating is F or G, unless an exemption applies. The legislation prohibits a landlord from letting out a substandard property. If there is an EPC in place which shows that the property is an F or G then it must not be let; otherwise the landlord is liable to penalties. This is subject to any available exemptions. Energy efficiency improvements must be carried out to bring the property up to an E rating at the minimum, unless one of the exemptions is applicable.

If a landlord lets and continues to let the property in breach of the regulations, however, the breach does not affect the validity or legality of the tenancy itself, so the rent still continues to be payable.

So what does SurreyLets suggest you do to get the best EPC on your property?

  • Replace any non-double glazed windows and or old sealed units with modern A rated windows The rating doesn’t matter unless you have a document showing the “U-value.’ If they are good new windows have a document showing the U-value rating ready for the assessor. Otherwise if the windows have a datestamp on them telling saying they are post or during 2003 they will get a good rating. Secondary glazed is obviously better than sing glazed also, which is what may need to get done in conservation areas where your not allowed to upgrade the windows
  • Fit seals to external doors to help keep the chill out, change any wooden doors with new PVCu doors (Again keep the u-value information to show the assessor) also note that if the door is more than 60% glazed it won’t count as it will just go down as a window.
  • Fit a decent jacket around your hot water tank or replace with a fully lagged tank -Spot on. The maximum the assessor can record is 160mm of insulation around the tank, makes a small difference.
  • Ensure that lofts and wall cavities are insulated to at least the latest standard of 270mm 
  • If replacing your boiler is getting old plan to replace and fit to an energy efficient, condensing boiler. 
  • Fit TRV (Thermostatic Rad Valves) to all radiators 
  • Fit zone thermostats 
  • Change old style electric storage heaters (if fitted) with the latest fan assisted heaters which have significantly better energy rating  (although electricity for heating will always have a very negative effect on your EPC. Oil, LPG and Mains gas always are better.)
  • Get cavity wall insulation installed or get dry lining with insulation (keep the proof you have had it done by invoice
  •  Use energy saving light bulbs such as LEDs. 


Implementation

From 1 April 2018, the regulations will apply on the granting of:

A new tenancy to a new tenant
A new tenancy to an existing tenant, i.e. any extension or renewal to an existing tenant. This includes a statutory periodic tenancy which comes into existence at the end of the fixed term shorthold.
From 1 April 2020, the regulations will apply to all privately rented property in scope of the regulations.
Enforcement
Local authorities will enforce compliance with the regulations.

For more information about how the new EPC regulations will affect you as a Landlord, or for more information regarding renting your property, please contact the Specialist Letting Team in Surrey at SurreyLets on 01483 282470

 

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