Labour confirms ban on letting agent fees in manifesto

In a nut shell, if Labour ban application fees, agents will charge their overheads to the landlords. Landlords want to make money so they will just put the rent up. Yes, I know they want to cap rents, but they are talking about capping rent increases not advertised rent for new lets which is where fees are charged. So, as a tenant, you would be paying extra rent anyway which in the long run, say £25pcm over a 3 year tenancy = £900, that is way more than we charge for an application, nearly 3 times! Also, how many tenants can commit to staying in a tenancy for 3 years?

Husband comes home from work, “Darling, I have amazing news, I got the promotion, car, payrise, longer holiday and the company will pay for our moving costs! I knew studying hard with the apprenticeship scheme and working those extra hours would pay off and now all our financial worries are over!” the partner then replies “We cant move though as we still have 26 months left on our tenancy!” and there you have that problem, as well as mortgage companies just not allowing BTL finance with a 3 year tenancy as many only want short term 6 – 12 month tenancies. This would also frighten away investors as they wouldn’t have any control thus less properties available, higher demand, and oh wait, that means rents go up! Read on my fellow friends and think about your vote!

Labour’s manifesto, published yesterday, has confirmed that the party will ban letting agent fees if it wins the election.

The manifesto also confirms that it will legislate to make three-year tenancies the norm and introduce rent caps.

The manifesto says: “For the 11 million people who rent privately, we will legislate to make three-year tenancies the norm, with a ceiling on excessive rent rises.

“A ban on unfair letting agent fees will save renters over £600.

“We will drive standards up by creasing a national register of private landlords.”

The manifesto also says that Labour will build at least 200,000 homes a year by 2020. Under Labour, a “new generation of garden cities” would also be built.

In a further confirmation of plans previously announced, the Labour manifesto says a mansion tax will be introduced to help fund improvements to the NHS.

Meanwhile, Eye’s story yesterday alerting agents in Walthamstow, London, that Stella Creasy and her supporters were due to embark on a mystery shopping exercise of their fees was highlighted by her on Twitter.

She tweeted: “amazing @alexhilton – letting agents upset walthamstow campaigners wanted to see if transparent about their fees….#saysitall”

Thirteen minutes later, she tweeted: “Want to know why Walthamstow needs Labour Govt? Local letting agents upset asking about fees – lab would ban them!”

For the record, all our fees for tenants are shown on our website, that’s transparency!

 

Best buys in the last 7 days

So, we missed a week but there was a good reason and a great cause. Back again, and here are few select purchases worth considering;

http://www.rightmove.co.uk/property-for-sale/property-51720230.html

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We would expect around £795 on this returning around 5.6% and possibly even as high as £845pcm

http://www.rightmove.co.uk/property-for-sale/property-51419306.html?premiumA=true

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This would return £700 and if you can get it as close to £120,000 as possible then that’s a nice little return of 7% minus costs

and this little bargain if your looking at return figures in Folkestone;

http://www.rightmove.co.uk/property-for-sale/property-33578883.html

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which at £695pcm is a 7% return and we are guessing Freehold too!

Good luck and please don’t hesitate to shout for our help if you are looking at your next purchase, I’ve already had 2 of our existing landlords ask for help in securing their next purchase!

 

Sorry!

If you have been following our blog for a while you will expect many exciting stories, property updates, good buys and generally amusing photos in that mix. I’m sorry that this week we only bring you this story but its very close to our hearts and like many of our close friends and this families close friends, we want to show our support for them. One extraordinary gentleman, Stuart Robertson, is running a half marathon and has pledged the sponsorship monies to the Ronald McDonald house that have been an absolute rock for this amazing local family. I wont steal Stuarts thunder and please please please read his page via the following link;

https://www.justgiving.com/Stuart-Robertson15/?utm_id=8&fb_action_ids=10153256978979510&fb_action_types=jgdonation%3Asupport&fb_ref=pfp-share-facebook-test-B-giving

It really is a case of we are asking for your support, doesn’t matter how small!

Thank you and we wish our friends and their son a very speedy recovery and our thoughts are with you!

Why politicians’ talk of banning letting agent fees is wide of the mark

There has been a lot of talk regarding banning tenant fees, but is this really the issue that should be a focus for reform or manifesto?

Claims that agents charge thousands of pounds in fees are simply wrong. Security deposits are not fees. A month’s advance rent is not a fee either.

In the last Property Ombudsman annual review, only 3% of issues reported related to fees and this figure included both landlords and tenants. It is also pertinent to note that not all of these complaints were upheld.

Then we see proposals for rent capping which will deter landlords and lenders from investing in new builds. Who will invest when their income is influenced by politicians? It’s hard enough for developers having to accommodate the ‘not fit for purpose’ Section 106 requirements.

Ultimately, the only way to reduce rents is to build more and increase supply. Three-year tenancies are welcomed by agents and professional landlords as they negate costly void periods. In my experience, it’s often tenants who want shorter contracts as they crave flexibility.

Make no mistake, the PRS can help the housing shortage and make rents more competitive. New pensions regulation give over 55’s an opportunity to invest and provide more homes so why are so many intent in making this wonderful opportunity look as unattractive as possible?

If any new government is serious about improving the industry then there is much that can be done which will be supported by most agents. Headline grabbing vote winning policies are not the answer.

Telling tenants they won’t have to pay fees and that rents will go down is a vote winner – but it will not improve standards and indeed may do the opposite. Starve landlords of income and repairs and redecoration will suffer.

When deposit protection was brought in by the Labour government, it declined to ensure monies were held in a custodial scheme. Most problems regarding unfair deductions from deposits are a direct result of this decision.

Further, neither Labour nor the coalition made Clients Money Protection insurance compulsory. Why? Thousands of agents want it and SAFEagent is all about showing the public which agents have CMP. But politicians will not legislate and refuse to explain their reasons.

Yes, there are rogue elements in the lettings industry as there are in every industry, but some credit should be given to the thousands of agents who voluntarily subscribe to a regulatory body and who comply with the increasing amount of red tape.

Further, the immense work undertaken by NALS, ARLA, RICS, UKALA and SAFEagent has been ignored and instead the entire industry has been pilloried.

Whilst I do not purport to represent the industry, I object to this unfair stereotype. We who comply with existing regulations are placed at a commercial disadvantage as such regulations are not policed nor enforced.

Citizens Advice has now called for tenant fees to be banned, saying that the 2013 Advertising Standards Authority ruling is being ignored by many and unenforced.

This was too early to be an April fool as the glaringly obvious flaw in this argument is who would police this new rule any more than the ASA one. Let’s be honest, it hasn’t gone well in Scotland for this very reason.

There are very real horror stories out there which disgust good agents as much as they do consumers, but a corrupt policeman doesn’t make a corrupt police force.

Politicians point fingers at the lettings industry and seem oblivious to the fact that only they can introduce legislation to change things. It’s like me complaining to a restaurant that I am overweight. The important thing all sides must achieve is consumer education. This will only be effective if we all work together and move away from the fractured partisan messages sent out by different groups for their own ends.

Some claim we double charge, yet no one objects to Sotheby’s seller’s commission and buyer’s premium.

Others claim we charge for doing nothing so clearly have never experienced how much work goes in to agreeing a tenancy. Conversely, perhaps the Government should pay us for all the work we do with immigrations checks, anti-money laundering and collection of taxes for HMRC.

Of course it is utterly unfair for hidden fees to be sprung on tenants at the eleventh hour or worse still after a tenancy has commenced. Some of these tenants are indeed captives of the lack of housing stock so don’t complain as they need a home.

I believe a simple amendment to Consumer Protection Regulations should be: “An agent cannot charge any fee which was not disclosed in writing prior to the commencement of the tenancy and any such fee demanded after this date will result in a fine up to x number of times the amount claimed. This should appear prominently on the fee tariff soon to be introduced.

Agents are open minded and adaptable and I have heard many ideas. Perhaps a reference fee should be payable by the landlord as it is they who actually benefit from it and it wouldn’t penalise tenants who lose out to another tenant through another agent.

Maybe the government could cap tenant fees in the way they have credit and debit card charges. In any case, likening us to loan sharks is as unhelpful as it is untrue.

What we should be doing is working together for the good of the consumer, not using an important issue to gain votes at the expense of the facts.

Most agents with whom I speak want regulation, compulsory CMP and transparency applied to all and those who ignore the same get punished. Educate consumers not to use agents who don’t comply and starve the so called ‘rogue’ element of business. Money talks.

Finally, to end where I began, whilst I agree industry should not use tenant fees as a cash cow, not being paid for the work we do and the reasonable costs incurred is wholly unfair.

After all, MPs weren’t banned from claiming ALL expenses, were they?

Written by Eric Walker and taken from Property Industry Eye

Best buys in the last 7 days

I know we missed a week but its been so hectic in the office and so exciting! News to come and all will be revealed very soon!

Remember this house?

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Well, deal done for one of our clients brothers and that has spurned him to look for others, possible second one in the same area, so glad we can help him!

At the cheaper end is this ideal 1 bed in Singleton

http://www.rightmove.co.uk/property-for-sale/property-48387184.html

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which would market around the £550pcm and if you haggled hard at say £96,000 it would achieve 6.9%, don’t forget to account for maintenance and ground rent charges

Now, I know its not everyone’s idea of an investment home but look at the return!

http://www.rightmove.co.uk/property-for-sale/property-33566577.html

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Based on £140,000 and a return of £750pcm, which is what we have just let a similar one at, this returns 6.4%!

We spoke about this one last time and its now been reduced so you may get even more off it!

We really like these quality apartments for a return and if you bargained at £145,000 and a rent of £750pcm this would return 6.2% minus lease costs

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http://www.rightmove.co.uk/property-for-sale/property-33996513.html

Thus, if you got it at £140,000 and really pushed the rent at £775pcm it would achieve 6.6% minus lease costs

Unusual to pick out a bungalow but I firmly believe you will get a long term tenant in this,

http://www.rightmove.co.uk/property-for-sale/property-49178650.html

we would market at £795 and expect a minimum of £750pcm which if you haggled at £160,000 would return a minimum of 5.6% freehold and safe money too

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Well that’s it for this week, good luck and don’t forget, if the deal seems too good to be true, it usually is but ask us before declining it!

1st Quarter Review

So, how is 2015 panning out for you?

Here at Evolution it has been a superb start to the year with some amazing price being achieved for our clients. If we compare a good size 3 bedroom detached modern home at the same time last year, £850pcm, and this is now achieving a minimum of £950pcm which is an incredible increase. We have watched good quality newer style 2 bedroom homes go from £750pcm to £800pcm. I firmly believe that as we have a local average income of just over £400 per week, £20,800 per annum, this would bring a joint average household income in at £41,600, this has had an impact on rents going up but the big question would be, are they going to top out? When you look at the referencing criteria from Homelet, at the maximum income of £41,600, this would allow a tenant to apply for a home up to £1300pcm. But lets not forget, that in a typical family home, our experience with applications teaches us that we generally have a full time and a part time earner. This shows a total income of £643.80 = £33477.60. You can add roughly £1120 for tax credits thus achieving a rounded £35,000 figure. This then equates back again to approx £1100pcm achievable for a home. Now lets be realistic, if you were buying a house, you tend to stretch every penny possible for the mortgage so that you can get your dream home, but when your renting, you would play it a bit safer so anything up to that magic £1000pcm is comfortable. If your buying, this would mean your budget of £170,000 would achieve just over 5.6% on a typical quality 2 bedroom home and a 3 bedroom would need to be under £220,000. If your confused or simply looking for support, just call us, we will help you every step of the way.

When your looking to buy a home, we have all heard the famous “Location, Location, Location” phrase and to a large extent this has still go to be a huge part of your search criteria, but don’t forget your target market! If your after a professional person or couple with good income and no children, they aren’t going to spend every penny on a large home with wasted space, but they wont settle for a small 1 bed flat. Aim for the 2 bedroom luxury apartment with outside space and mod cons. We currently have a client in Singapore who is just about to complete on his next purchase of one in Bridgefield, and yes, we have what we think is the perfect couple for it, just need it to complete and the deal should be done. Another client of ours is going through the purchase of 2 new build apartments in the same area and is clearly aiming for the above mentioned clientèle. Don’t forget though, if you buy a 2 bedroom house and try and shoe horn a family with 3 children in to it, you will get very high wear and tear and thus a greater potential for damages. If you are considering your next move with your portfolio, just call us, we are here to help and our advice is free.

The other major achievement this year is that Freya is fully operational in the Folkestone area and is covering from Hythe right round to Dover and inland to Hawkinge and surrounding villages. We spoke about Freya at the very start of this year and she has certainly become a huge asset to us and also our clients. She is on hand and available when you need her and also has extensive local knowledge, so dont forget to discuss your needs with her. Check out her microsite on rightmove and simply call her on 01303 891733 or email her freya@evolutionlettings.com

http://evolutionlettings.com/blog/so-whats-the-verdict-on-2014-2/?preview=true&preview_id=906&preview_nonce=dd3d3bfbea&post_format=standard

We are expanding as promised still though so watch this blog for our next huge announcement, can you guess which town is next?

Thank you for your continued support and here’s to completing the 1st half of the year! (I know, where has the time gone??!!)

 

 

All figures quoted in this post are taken from the following; http://www.kent.gov.uk/__data/assets/pdf_file/0020/8183/Earnings-in-Kent.pdf

 

HAPPY EASTER!!!

April- Local Home Page - October -01

We wanted to wish all our customers and clients a really Happy Easter. We  hope that you get to spend quality time with family and friends and remember the true meaning of Easter. Its not just about giving and receiving lots and lots of chocolate, its not just about time off work and eating way too much roast dinner, remember the less fortunate whether we are talking about at home or abroad, homeless, starving or terminally ill.

At Evolution we we were approached by the Ashford Freewheelers, a plucky group of local cycling enthusiasts who are cycling the London to Paris event in aid of the British Heart Foundation.

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https://twitter.com/ashfreewheelers

and their Video is here

https://www.facebook.com/video.php?v=808958772556967&pnref=story

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As a keen cyclist myself, this was a really great chance to support these guys and we hope you will take a moment to do the same via the following link;

https://www.justgiving.com/Ashford-FreewheelersLondonParis/?utm_id=11&fb_action_ids=10206471428372277&fb_action_types=jgdonation%3Asupport&fb_ref=pfp-share-facebook-test-C-control

All they want is support for this amazing cause, remember, this is their time, they are not being paid to do this!

Here are a few photos of the guys out and about!

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