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Nov 16, 2016: First NALS Fair Fees Forum

An outright ban on letting agent fees charged to tenants would harm the entire market, result in higher rents for tenants and lead to the closure of some businesses, a meeting of influential agents has said. The NALS Fair Fees Forum met for the first time this week, in London, to discuss the issue of upfront letting agents’ fees, and possible alternatives to the outright ban in England for which the likes of Shelter, Citizens Advice and Generation Rent are lobbying, and which Labour will ban if it gets into power. The event brought both industry and tenant groups together in the first forum of its kind about this controversial issue. The morning session was for agents only and included delegates from major letting agent and property management firms including Belvoir, Chestertons, Foxtons, Hunters, Leaders, Northwood, Portico, Savills, Society, Spicerhaart, Touchstone and Winkworth. The group exchanged information on fee levels and models. Members agreed unanimously on the absolute need for fair, justifiable and transparent fees, and said that excessive fees should be curbed. The agents also agreed that in preparing the rental contract and as part of the rental relationship, they provide a service for the tenant for which agents should be able to charge reasonably. The agents agreed an outright ban would negatively affect the market, and discussed the law of unintended consequences, such as higher fees, fees being hidden or passed on to the consumer in another form, a drop in standards and/or the closure of some agencies. Consensus was reached that the industry needs to speak with one voice and that it should be proactive. The afternoon session was a larger gathering including representatives from British Property Federation (BPF); Shelter; Crisis; Residential Landlords Association (RLA); Greater London Authority; Ombudsman Services: Property; and Property Redress Scheme. The Department for Communities and Local Government was also represented, but listened rather than participated in the discussion. Robust viewpoints were discussed ranging from support for an outright ban through to a potential cap on upfront fees. There was a clear consensus that further work needed to be undertaken, not least with regard to the current lack of enforcement for those letting agents who do not explain their fee structure clearly or adhere to the requirement to display fees. The forum agreed to the creation of the Fair Fees Working Group, to bring forward workable alternatives to an outright ban on all fees. NALS – the National Approved Letting Scheme – will provide the secretariat for the working group and DCLG will attend meetings in ‘listening mode’. The first session of the new working group will meet within 18 days to explore: Transparency – how to provide further clarity on fees to tenants and the service the agent is providing Enforcement What is ‘reasonable’ regarding fees? Affordability for vulnerable tenants The outcome of the ban on fees in Scotland via Property Industry Eye http://www.propertyindustryeye.com/industry-grabs-initiative-to-avoid-outright-ban-on-letting-agent-fees/

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