By Craig Smith
On June 1, letting agents in England and Wales will no longer be able to charge additional administration fees to tenants.
The changes have been resisted by some agents who fear they will negatively affect the revenues they can generate, but these practices have been in place north of the border for some time and they have worked well.
Here, they had the effect of distinguishing credible, high street agents from less scrupulous operators who often subsidised rock-bottom management fees with earnings from tenant fees.
The ban on fees, while being a minor inconvenience for some agents, indirectly helped trusted and established businesses like Scottish Property Centre to consolidate our position on the high street.
Not only was the ban good for our business, it helped to strengthen the relationship between landlords and tenants.
Indeed, many members of both groups now agree that Scotland should be used as a model for lettings across the UK.
The regulations included in the Tenant Fees Bill in England and Wales have been in place in Scotland since 2012.
Additionally, Section 21 eviction notices no longer exist north of the border, while the Scottish Government recently introduced much greater security for private tenants.
Scotland has been a guiding light in improving tenants’ rights and altering for the better the relationship between landlord and tenant.
In the past that relationship could be adversarial and fractious, with one pitted against the other and regulations were not particularly effective in resolving disputes. Rather, they seemed to be aimed at disposing of tenants’ complaints rather than addressing them.
Letting fees were never as much of a feature of the system here, compared with in England and Wales where they are commonplace.
These unwarranted and unfair charges are presented in the guise of administration expenses, often with little or no explanation of what they’re for or why they’re being applied.
Such charges sometimes account for up to a third of an agent’s income which is why those people are reluctant to see them banned or scrutinised in any detail.
There were some pessimists who forecast the ban would damage the lettings market in Scotland, but it never happened. The best agents and landlords rolled with the punches, accepting it was fairer for tenants and that it contributed to a better relationship with landlords.
Similarly, the end of no-fault evictions and greater security of tenure for tenants were resisted in some quarters but these measures have given agents, landlords and tenants an opportunity to build better relationships built on trust and mutual, long-term benefit.
Craig Smith is a Director of Scottish Property Centre Shawlands
If you have a property you want to let or if you are thinking about investing in buy-to-let properties, contact your local Scottish Property Centre branch or visit www.scottishpropertycentre.net