Letting agent fees are a problem for buy to let landlords – especially after a consumer watchdog ruling that demands agents publish their costs when advertising properties.
For too long, landlords have overlooked this variable over which they have no control.
Letting agent fees can affect how long a property stands vacant, and in some cases where landlords are racking their brains over why a perfectly adequate home at a competitive rent is failing to let, the one factor that is not considered is the fees a tenant has to pay to get the keys.
If you went out and asked 100 landlords how much a tenant has to pay in letting agent fees to rent a property, the odds are those who know could be counted on the fingers of one hand.
However these fees are important and should be out in the open.
One of the checklist questions a landlord should ask a letting agent is how much do tenants pay?
If the letting agent declines to tell you, then consider another agent who will, because this could mean perfectly good tenants are turning down your property because of the letting agent’s cut.
Letting agents were stunned by the Advertising Standards Agency decision that failing to include fees the tenant must pay prior to letting in advertising breached consumer standards.
Now, a group of leading agents has met the Office of Fair Trading to discuss the issue, on the grounds that the ASA can refer cases of rule breaches to the government agency.
To interested observers, the move could look like an effort to bypass the ASA.
Isobel Thomson, of the National Approved Letting Scheme (NALS) said: “Since the ASA ruling the industry has been trying to reach a conclusion as to how agents can comply. Given that the ultimate sanction the ASA has available is referral of non-compliant agents to the OFT or Trading Standards, it made sense to meet with them in light of their regulatory role at the earliest opportunity. We wait to hear the outcome of their consideration of some of the practical issues raised.”