By Steve Roulstone
There is an article in this week’s Property Drum on page 8 that has caught my eye as one of the chain of Letting Agents who have had to address issues in Scotland have commented upon the Shelter campaign surrounding the removal of Tenant fees. I would have to say I agree with some of what they say, but I disagree with the main thrust of their argument.
Explaining the group.
First, to place some context behind what I wish to say about the subject, I need to explain where the difference lays between Martin & Co offices and Castle Estates offices, because we both have a Franchising background, but now Castle Estates is an independent group who share the same name, but operate entirely independently of each other and have no central controlling Head Office. Martin & Co remain a Franchising organisation where centre influence and dictate the policy of the group.
Comments are my own.
Therefore I am commenting as an Independent Castle Estates in Staffordshire and not as the Head of an organisation in the same light as Sue Hopson, head of standards at Martin & Co is doing. As far as Castle Estates offices are concerned, if they operate in a manner I disagree with, then they are also the target of my comments.
Agreement.
Firstly I must say that the whole idea of dropping Tenant fees altogether as is the case in Scotland does not just move costs from the Tenant to the Landlord, for just as sure as Landlords will have to pay for the costs generated, these costs will be offset by increases in rent. Then, as has always been the case, market forces will drive rent levels to their correct rate. But they will start from and therefore remain at a higher level.
Major factor missed.
What the comments miss are the manner in which many Agents and I am not referring to anybody specifically when I say this, reduce Landlord fees and raise Tenant fees so they can market themselves as a cheap Agent in to Landlords in the first place! This is a short sighted policy and will surely attract the attention of such groups as Shelter and the CAB who have been looking at Tenants fees for well over ten years.
Bad practise.
In a market where the number of offices offering Letting services has probably doubled in the last three years as Estate Agents flooded to the Lettings Industry for financial reasons, the opportunity to advertise services to Landlords at low prices at the expense of the Tenants has seemed to much of an opportunity to miss for some. But the short sightedness of such an approach should Tenant fees be scrapped in England will need to be explained to Landlords and of course all of us will have to do this, not just those who overcharge.
Long term practise.
It is also a fact that high Tenant fees are nothing new and I have no problem in pointing the finger at Estate Agents who historically have been the main protagonists of this practise. Do I have Tenant fees? Yes, but they have hardly changed in over twelve years and I am happy to justify them, as I have done before now, to any Tenant coming through our system.
Inevitable?
Unless our Industry receives the backing of the Government in driving through legislation to ensure professional standards are upheld by all Letting Agencies, or they can no longer operate, then I believe the day will come when Tenant charges are dropped altogether justified or not, because those with this objective will always be able to point at practises that take advantage of Tenants where fees are concerned. But equally, as I have pointed out that from my own perspective I speak for my own office only, anybody else speaking on the subject should not ignore the current practise of high charges and should be able to ensure that offices under their control can justify what they charge Tenants as well!
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