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Ban of letting agents fees – consultation

Why are Shelter Quoting Out of Date Research to back up their Flawed Argument ?

Scotland banned Letting Fees in 2012. The charity Shelter have been a big voice in persuading and lobbying the Government since it managed to persuade the Scottish Parliament ban fees in 2012.

On all the TV and radio shows at the moment, they keep talking about their Independent Research which backs up their argument that rents didn’t rise, which they say was published in 2014.

A researcher for Shelter in Scotland published these comments yesterday,

“renters, landlords and the industry as a whole had benefited from banning fees to renters in Scotland. It found that any negative side-effects of clarifying the ban on fees to renters in Scotland have been minimal for letting agencies, landlords and renters, and the sector remains healthy.”

Going on,

“Many industry insiders had predicted that abolishing fees would impact on rents for tenants, but our research show that this hasn’t been the case. The evidence showed that landlords in Scotland were no more likely to have increased rents since 2012 than landlords elsewhere in the UK. It found that where rents had risen more in Scotland than in other comparable parts of the UK in 2013, it was explained by economic factors and not related to the clarification of the law on letting fees”

The report Shelter mentioned was published in December 2013  (only 12 months after the ban).

How can Shelter quote a report today, in late 2016, when that report they use as proof  that rents haven’t risen was published in Dec 2013, only 12 months  after the ban (and you think about it, these reports take a few months to compile), so the report was only based on figures around nine months after the ban came into action (FYI – The ban was Q4 2012)

What really happened to rents in Scotland

Research up to the end of Q3 2016, tells a different story:

In Scotland, rents have risen according the CityLets Index by 15.3% between 2012 and today (CityLets being the equivalent of Rightmove North of the Border – so they know their onions). When comparing the same time frame, using Office of National Statistics figures for the English Regions between 2012 and 2016, this is what has happened to rents

  • North East 2.17% increase
  • North West 2.43% increase
  • Yorkshire and The Humber 3.21% increase
  • East Midlands 5.92% increase
  • West Midlands 5.52% increase
  • East of England 7.07% increase
  • South West 5.82% increase
  • South East 8.26% increase
  • London 10.55% increase

..and let me remind you of Scotland … 15.3% increase.

Conclusion

Has the Scottish economy has outstripped London’s over the last 4 years? Are really telling me wages and the Scottish Economy have boomed to such an extent in Scotland in the last 4 years they are now the Powerhouse of the UK.

The answer is a cap on fees. A fair price for the work involved, as a one-off cost. Otherwise, Tenants will pay the price in higher rents. (As seen in Scotland).

scotland rents

scotland rents

 

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Posted: 5th December 2016

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