Blanket ban on agent premiums not the answer, say Lettingweb

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Leading UK letting portal speak out about the inherent problems with the government’s decision on letting agent premiums

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The costs may be passed onto landlords, which in turn could lead to increased rents.

The Scottish Government has clarified its position on the debate over Letting Agent’s fees for tenants, and decided that the law should prohibit any extra charges.

The ruling means that all fees from Letting Agents to tenants, other than a refundable deposit and rent, will be deemed illegal from now on. That includes fees for credit checks, references and inventory fees; these costs will all have to be borne elsewhere from now on – which could mean bad news for agents, landlords and tenants.

Hundreds of letting agents operate in Scotland – Lettingweb alone has several hundred Scottish agents, who let thousands of properties, with over 2,000 properties live on the site in Edinburgh and Glasgow alone. The consultation – which launched earlier this year – could have a detrimental effect on these agents, who have no other way of covering the costs.

Shelter Scotland, who’ve been campaigning against tenancy fees through their Reclaim Your Fees website, welcomed the move, with their head of policy Gordon MacRae stating that ‘This is great news for everyone who has been ripped off by unscrupulous letting agents. It will finally put an end to this unlawful practice and ensure that tenants are no longer exploited.'

Lettingweb have a different take on the issue. A lot of the fees charged by letting agents are not unscrupulous – they are there to cover the cost of the various checks and references that agent’s have to undertake as part of the letting process.

Steve Tigar, Lettingweb’s Managing Director, had this to say on the issue:

‘This decision will force a lot of letting agents’ to evolve their revenue model. With no other way of paying for these necessary administrative processes, the costs may be passed onto landlords which in turn could lead to increased rents. This is obviously not what the consultation was trying to achieve, and it’s why we’ve been speaking out against the campaign.’

This, along with the news last week that the Government is looking to the private sector to boost housing in Scotland, point to an uneven standpoint from the SNP. Overall, this legislation looks set to hurt tenants in Scotland, and the agents that are there to help them.

If you’ve been badly affected by the decision, contact Lettingweb to see how we can help, with free legal advice and other member benefits.

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Patrick Foot

Patrick Foot
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