3rd
Sep 2017
In the latest report on the private rented sector, the Welsh Government states that tenants are finding it increasingly difficult to find rental properties because of having to pay 'upfront fees.'
The Welsh government is looking into following Westminster's lead in banning agents' fees.
The report also looked at the renewal costs that some tenants have to pay on existing tenancies and said: “Charges for renewing a tenancy are particularly difficult because the tenant is less likely to have been aware of these upfront, or may be in a different position financially by the time a tenancy is renewed.”
The report does understand that agents have administration duties which in most cases are not excessive, as “work involved for agents setting up a new tenancy” and that they “do not generally make excessive profits on setup fees in relation to costs incurred.”
However the report is damning to landlords when it stated that there is “no compelling evidence as to why tenants should pay the fees rather than the landlord.”
The report also said: “The large majority of the work undertaken by agents is work that the landlord would otherwise be doing themselves.
“Referencing tenants is a service to landlords, not tenants.
“Inventories and tenancy agreements do protect both parties from false accusations, but it is soon to be a legal obligation on the landlord to provide a tenancy agreement, and therefore it is a service to the landlord to do this job for them.
“Arranging viewings and advertising a property are also a service to landlords, just as a job advert 60 is paid for by the employer, and estate agents charge sellers, not buyers, to advertise their home.”
The report also claimed that its research found that although many landlords had considered managing properties themselves, it would be very unlikely that would take up the option.
The report says: “If fees to tenants were banned, agents could recoup the costs of setting up new tenancies in the fees they charge to landlords.
“They are free to decide how to do this and could take a higher upfront fee or take a higher cut from the first month’s rent, the first six month’s rent or the entire tenancy, as they wish.
“However, this research suggests that landlords would be less likely to cease using agents if increased management charges were taken from the rent than if they were asked for a higher upfront fee.”
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