Letting agents to publicise fees charged to landlords and tenants

As from today (27th May 2015), it is a statutory duty for letting agents to fully publicise the fees they charge to both landlords and tenants. Under the Consumer Rights Act 2015, letting agents must visibly display a list of their fees at each of their offices, including their website.


These new requirements have been issued by the Department for Communities and Local Government with some input from the Advertising Standards Authority. The new guidelines state that, "all fees, charges or penalties (however expressed) which are payable to the agent by a landlord or tenant in respect of letting agency work and property management work carried out by the agent in connection with an assured tenancy. This includes fees, charges or penalties in connection with an assured tenancy of a property or a property that is, has been or is proposed to be let under an assured tenancy.”


All fees must also be inclusive of VAT. Letting agents however, do not need to publicise the rent which is payable to a landlord or the tenancy deposit which is taken as security against any damage or violation of the tenancy agreement.



These guidelines are enforced by Trading Standards. Non-compliance will result in a fine of up to £5,000. Lower fines will only be applicable to those in extenuating circumstances. Common excuses including, ‘I did not know about the law’ or ‘I did not know what to do,’ are no longer acceptable.


This change now means that a breakdown in costs are required. All fees should be clear without surcharges or hidden costs. Fees for things like 'administration fees' will no longer be acceptable, with all charges being displayed inclusive of tax.


In addition to these changes, letting agents must also display which redress scheme they have joined. There are three redress schemes and they include:


- The Property Ombudsman


- The Property Redress Scheme or Ombudsman Services


- Client Money Protection (CMP)



But what do you think? Start your own discussion in the LawStore Social Landlord and Tenant forum.

Landlords to register deposits or risk facing a fine

Buy-to-let investors have until the 23rd June to register for an official deposit scheme or face a fine of £3,600. Thousands of landlords could face a penalty if they fail to register their tenants deposits. This warning comes as the government runs a 90 day amnesty for buy-to-let investors who have not put theirs tenants deposits into an official scheme.

If a landlord fails to register by the 23rd June, the fine will be unlimited. The fine is calculated by tripling the initial deposit. The average initial tenant deposit is £1,200. Despite legislation enforced in 2007, it is estimated that around 1 in 3 of the 1.5 million private landlords in England and Wales, are not registered with a deposit protection service.

It is important to note however that not all landlords fall under this scope of legislation. For instance, arrangements which are different to a tenancy, including lodgers and university lets are excluded. All landlords which have an 'assured short hold tenancy' agreement must register with a government backed scheme.

As well as potentially receiving a penalty fare due to a failure to register, landlords will also face being powerless if the tenant wishes to leave at the end of their contract. This is also the case if the tenant wished to raise a dispute with the landlord.

Introduced in April 2007, deposit protection was set up as a compulsory scheme eight years ago to mediate disputes at the end of the tenancy.

Richard Lambert of the National Landlords Association has suggested that "there are now a large number of deposits that need protecting despite not previously needing to be, and it’s likely that many landlords won’t even be aware of what they need to do". In addition to this, he has also highlighted that "landlords who still hold a deposit should protect it if they haven't already done so, which will ensure that you can legally regain possession of a property [if you need to]." 

Do I need to register with a deposit scheme?

Buy-to-let properties which have an 'assured short hold tenancy' contract in place should have the tenants deposit protected within a government approved scheme. There are however certain exceptions such as a university hall of residence or a lodger renting a room in the landlord's home.

Landlords have 30 days from receiving the deposit to register it with one of the following:

• Deposit Protection Service
• MyDeposits
• Tenancy Deposit Scheme

In the case of a dispute between landlord and tenant, the deposit will be protected in the scheme until the issue is sorted out.
 

Pay double to rent in the capital

Those renting in London are paying twice the amount than other tenants across the rest of Britain. The average monthly rent in the capital has hit £1,412 compared to just £694 in the rest of the country. In a report which compares rent prices to tenant incomes, the North-east of England, Scotland and Wales were said to be at the most affordable level. In London, the average tenant spends around 45% of their annual income in order to stay in rented accommodation.

According to the HomeLet Rental Index, 10 out of 12 regions in Britain are experiencing a rise in rental prices. Those in both the South-west and South-east are also feeling the squeeze after paying 39% and 34% of their yearly income on rent. While some argue that the average wage in London is much higher than other areas throughout the UK, the ability to afford rent is still at a tight squeeze. The chief executive of Barbon Insurance, Martin Totty has argued that “for a rental property to be affordable, a tenant’s gross income must be at least 2.5 times his or her annual rent. Our data shows that rents in London have pushed beyond that”. 

The table below shows the average monthly and yearly rental prices across the UK in comparison to the average income and % of income used from salary to pay for rent based on location.

RENT PRICES	MONTHLY	ANNUALLY	TENANTS INCOME	% OF INCOME
Greater London	£1,412	£16,944	£37,800	45%
East Anglia	£781	£9,372	£28,900	34%
Wales	£584	£7,008	£24,300	29%
South-west	£813	£9,756	£24,900	39%
South-east	£863	£10,356	£30,300	34%
West Midlands	£625	£7,500	£23,400	32%
North-west	£665	£7,980	£24,100	33%
Yorkshire & Humber	£600	£7,200	£22,700	32%
N Ireland	£567	£6,804	£23,800	29%
East Midlands	£579	£6,948	£23,300	30%
North-east	£507	£6,084	£22,700	27%
Scotland	£578	£6,936	£24,200	29%

 

So is there any way you can get cheaper rent? 

Although it may not seem possible but there are several things you can do to negotiate a cheaper rent.

ü   

    - Do your homework and see how long the property has been on the market for.

ü   - Check out what prices the other homes in the area are renting for.

ü   - It’s always good to sell yourself; other references will help show that you have a good credit rating.

Remember; the more information you have the easier it is to strike up a deal. In addition to this, you can also offer to sign a longer lease for less rent because it actually costs the landlord money when a tenant decides to move out. Therefore, the longer your stay, the more appealing your offer as you offer both stability and a regular income. 

If you are a tenant and you are facing some legal issues with your landlord contact us today for straightforward and jargon-free advice. Also, if you are thinking of buying a property and leaving your rented accommodation behind visit us online for more information and advice. A free instant online conveyancing quote is also available here.

Tenants Vs. Landlords

 

A new survey conducted by Ocean Finance reveals that half of those who rent privately have been ‘ripped off’ by either their landlord or letting agent.  The poll conducted from 2,000 UK adults shows a high level of dissatisfaction amongst tenants in regards to the service they receive.  The reasons given were:

·         53% of tenants were unhappy due to a failure to do repairs

·         47% of tenants were unhappy by the delays in getting things fixed

·         37% of tenants were unhappy about tenancy deposits not being refunded

·         25% of tenants were unhappy with the unreasonable reductions from the tenancy deposit

·         23% of tenants were unhappy with the unreasonable  increases in rent

·         22% of tenants were unhappy being handed unreasonable fees to start the tenancy agreement process.

As a result, Citizens Advice Bureau has highlighted that there has been a growing concern among private tenants who are facing evictions despite being up to date on their rent payments. In addition to this, the CAB is also witnessing a 38% increase in those without rent arrears who have been threatened with an eviction. According to the CAB, over 5,000 issues in regards to tenant evictions have been reported in both 2013 and 2014. Around 3,750 issues had been reported the year before.

So what about buying a home?

Latest statistics show that more and more people are teaming up in order to buy a home. New research conducted by Santander Insurance shows that 22% of people who wish to make a joint purchase within the next 2 years will do so with their unmarried partner. 13% of those wishing to purchase will share the purchase with their parents, whilst 4% will make a joint purchase with a friend or other relative.

23% believe that the main reason for making a joint purchase is that it is the only way for them to get their foot on the property ladder. Other statistics show that only one fifth of those planning to make a joint purchase will do so as they simply want to live with that person. Whilst 16% will make a joint purchase as they believe that it will leave them less financially stretched. And finally, 15% will do so in order to afford a larger property.

So whether you are a tenant or a landlord in need of some legal advice, contact us at LawStore Conveyancing today for a straightforward and jargon free solution.  If you’re thinking of making a joint purchase on a property then visit us in store today to ensure all the legal forms needed are completed and up to date. Or simple call us on 0845 603 6544 or visit us online.

At LawStore conveyancing, we offer a fast and cost effective solution to all your conveyancing needs. Get a free online conveyancing quote when you visit us online and see how much we can save you.