The general feeling in the property profession regarding last week’s autumn statement is that the proposal for banning letting agent’s fees charged to tenants was more politically motivated than practically orientated.
I have read comments by leading national letting agents and listened to friends and colleagues in the Sheffield market, all suggesting it will ultimately be the tenant who picks up the bill by way of higher rents.
Over the years, the additional work being carried out to comply with changes to legislation together with ID checks, puts a whole layer of administration into any professional practice, with extremely serious consequences if procedures are not adhered to.
The two main bodies governing the property industry in the U.K., the RICS and NFoPP put responsibilities on their members to conduct themselves in an appropriate professional manner and provide terms of business to their clients, whether it be relating to a letting, a sale on the open market or by auction. Who is the client you might ask? In the past, it was clear cut - your client was the person who instructed you to do the job, whether it be a sale or a letting and that is, or should be, very definitely still the case. Recent legislation has however put a greater liability towards the ‘consumer’ leading to greater responsibilities to parties other than the seller or landlord.
I think it is perfectly reasonable for agents and their clients to recoup some of these administrative costs as long as they are fair, reasonable and clearly outlined in any pre contract negotiations.Unfortunately, there will always be those who spoil it for the vast majority of professional agents. Like it or not, we need investors to make properties available in the rented sector to meet the demand resulting from our national housing shortage and we need professional letting agents to bring landlords and together at a market rent.
The thing that I find most frustrating in my 35 year career, is that successive governments have not been bold enough in implementing all of the 1979 Estate Agents Act, especially regarding the minimum standards for those involved in the profession. It seams unfair that a large proportion of hard working, professional agents are ‘doing things by the book’ whilst literally anyone can set themselves up as a letting or sales agent, regardless of experience and qualification, all because it is deemed to be ‘anti competitive’
Time will tell as to the impact of the ban and the changes to tax relief and stamp duty that will no doubt affect investors large and small in Sheffield’s ‘big village’
Adrian Little is senior partner of Mark Jenkinson and Son and is a member of the RICS Real Estate Auction group in London that responds to the many changes affecting the property industry and in particular, auctions.