How Landlords Can Avoid Additional Costs Resulting From The Autumn Statement:
Thu 15 Dec 2016
What Does The Autumn Statement Mean For Landlords?
Following the recent Autumn Statement that letting agent fees to Tenants are to be scrapped, concerns have been raised by Landlords as to whether the costs will simply be passed onto them. Some agents have been known to charge exorbitant fees to both Landlords and Tenants, for what seems like not much effort, and fees can vary wildly from one agent to another. It is unlikely to be only Tenants and letting agents who are affected by the new legislation, so how will these changes affect Landlords?
Landlords are concerned that getting rid of Tenant fees will mean the fees are simply passed across to them from the Tenant by the agent. Whilst this is one possibility, and some agents will be considering along these lines, this is not necessarily essential. Over the past six months we have noted a shift in the Tenants fees from various agents, already significantly reducing their fee. This has made moving easier and less expensive for Tenants, which has resulted in quicker lets and reduced void times. The big question is how can you, as a Landlord, avoid paying the shortfall?
Letting Agents sadly do not provide their services for free. However, letting a property can be a minefield of legislation, which can result in large fines, the inability to evict a Tenant, and even a prison sentence. Therefore, we would advise against trying to let your property yourself if you are unfamiliar with these pitfalls.
The best way to avoid increasing costs is to choose your agent carefully. Most Landlords are mainly concerned with the percentage fee of an agent, but Landlords should also ask what other costs are involved, to make sure there are no hidden extras. Ask for a price list, and always ask if fees are subject to VAT, as this can make a big difference. Ask what exactly is included, as some letting agents will include extra services for free, or these may be negotiated separately.
Many letting agents will be trying to reduce their overhead costs to avoid increasing their costs to Landlords, and these agents will likely offer the best value for money. Smaller, independent agencies will have more flexibility, those in an office will already have lower overhead costs, and agents who send documents by email, rather than post, are all likely to be able to pass on savings. Whilst the ban on Tenant fees is not likely to be implemented until 2018, it is best to start planning ahead now to make sure you get the most out of your investment property.