There has been plenty of media coverage with regards to the recent Government announcement that the Tenant Fees Act will come into force on the 1st of June 2019.
Without doubt, it is a change that will have a major impact on many lettings agencies across the UK and how they operate day to day.
I would expect the impact may be felt most in the more affluent areas and cities across the UK, such as London, where demand for lettings properties has enabled agents to charge significant upfront costs for issues such as credit checks, inventories, chasing references and administration.
Whilst this issue has caused some controversy – with suggestions that tenants are currently being charged £337 in fees on average across the UK – the new law should bring benefits to both landlords and tenants also.
At Garness Jones Residential, we see that as a positive step.
A warning has now been issued to lettings agents to review their tenancy agreements to ensure they are fit for purpose when the fees ban takes effect in June.
Effectively, the only upfront money agents and landlords will be allowed to take from the summer onwards will be payments for rent and deposits from tenants, with deposits limited to five weeks in all cases where annual rent is below £50,000.
Our lettings properties across Hull and East Yorkshire can vary in cost for rent from as little as £58 a week in areas within the city itself to £120-£150 a week in popular East Riding towns and villages such as Beverley, Cottingham and North Ferriby.
Given we have only ever required a month’s rent as deposit before handing over the keys to our tenants, as an agency we are well placed to meet the new requirements already.
We have always recognised that the original outlay of cash, particularly for those on low incomes or with little to no disposable money, can prevent people getting the property they want, and that is not what we are in place to do.
Our role is to ensure landlords have rented properties, and that tenants are supported every step in finding a home.
It has been with that in mind that our total administration costs have been as little as £150 – probably one of the lowest of all agencies in the last few years – and why we as an agency have less to worry about than many others.
Effective property lettings agents will still be needed by landlords
Moving forward, there has been some suggestion that some landlords may now look to cut out the agencies they use and go it alone.
However, effective and knowledgeable agents should be much more than a costly middleman, and should be the people who can make property port-folios work, keeping both residency levels and returns high.
The onus is now on agents to do exactly what they should be, providing a great service to landlords. They now need to demonstrate their worth by proving how their specialised and knowledgeable support helps.
Agents must offer an effective management service, taking away the stress for property owners by marketing properties effectively and finding suitable tenants at speed.
They must manage properties to ensure they are well maintained and appealing to prospective tenants, ensure they are priced at the right level and collect rents effectively for landlords to minimise arrears.
Our properties are all marketed on the websites Rightmove and On The Market, services which ensure the highest volume of potential tenants given the huge numbers who scour them for homes.
Such a service would prove very costly for individual landlords to use with a low number of properties. We also conduct viewings on behalf of our landlords, ensuring their properties are presented in the best possible way.
Alongside this, many landlords will not be keen to take over roles such as credit checks, references, and arranging and managing the tenancy.
Now is the time for residential lettings agencies to prove their worth. They can do more so than ever following these law changes, and our team at Garness Jones Residential is confident we will continue providing a great service to those who turn to us for our expertise.