Currently viewing the tag: "fees"

Complaints against letting agents increased drastically during 2012, occupying the majority of the Property Ombudsman’s time and increasing the organisation’s workload.

During 2012, the Property Ombudsman received a total of 15,782 complaints, including those made against both Estate agents dealing with property sales and lettings and property management agents concerning renting property.

The increase in volume was a 12% jump up from 2011 when there were 14,066 complaints and landlords were slightly more likely to make a complaint about letting agents rather than the tenants complaining about landlords.

In addition there was also a 39% increase in the number of cases referred for formal review or easy resolution. In total, the Ombudsman supported 73.8% of complaints against lettings agents.

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Take That To The Bank

Guest post by Bobby Gill

Ever been frustrated or felt ripped off by your bank?

Yep thought so.

Maybe this letter will make you feel better and give you some ideas next time you contact them… shortly before closing your account and banking with a Co-Operative Bank instead!

Read more of Bobby’s thoughts and musing here – http://bobby-gill.blogspot.co.uk

Dear Sir:

I am writing to thank you for bouncing my cheque with which I endeavoured to pay my plumber last month.

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Buy-To-Let Mortgage Fees Increase 70% in 4 Years

Buy-To-Let Mortgage Fees Increase 70% in 4 Years

Since end of the UK property market boom in 2007/8, property investors have seen a dramatic fall in the number of mortgage products available to them, (from over 300 BTL mortgage products in 2007 to less than 100 available in 2012).

To make matters worse Buy-To-Let (BTL) mortgage fees have increased more than 70% in the same timeframe, making a typical investment mortgage arrangement now cost approximately £1,500 (GBP).

Moneyfacts, the financial information provider, claim that the average BTL mortgage fee was £899 (GBP) before the Bank of England base rate fell to 0.5% more than 3 years ago. The average Buy-To-Let mortgage fee is now around £1,514 (GBP), almost double what it was at the height of the UK property boom and with less than a third of the market choice of products.

Sylvia Waycot, spokesperson for Moneyfacts, said “There is no logical reason for the increase in fees charged. Mortgage administration costs cannot have jumped 70%. Credit searches are no more complex than in previous years, so why are fees so high? It could be that lenders are keen to push fees because they are an upfront cost, which means they get the money at the start regardless of fulfilling the full length of a fixed term. And should you not fulfil the full length of the fixed term that can open the door to a whole host of other upfront charges.”

The average arrangement fee on a two-year fixed rate Buy-To-Let mortgage is now around £1,500 (GBP) with a five-year fixed rate mortgage around £1000, if investors are going to put down a deposit of 25% they may secure a rate better than 4.49%.

For a list of Buy-To-Let Mortgage providers click here

Controversy has been ignited after Labour’s mayoral hopeful Ken Livingstone declared all-out war on letting agents and rogue landlords in London, whilst calling for rent caps.

Critics said his plans to intervene in the market, and cut rents to no more than one-third of a tenant’s wage, would result in landlords having to lower rents, leaving their yields in tatters and acting as a deterrent to further buy-to-let investment.

If elected in May, Livingstone will establish a London-wide, not-for-profit lettings agency, paid for by the public purse, and to be run by the Mayor’s office. Although  handful of local authorities do run lettings agencies, none begins to be on the scale proposed by Livingstone. There is speculation that other large metropolitan authorities could decide on a similar path.

Castigating letting agents across London, he called for rent controls and widespread intervention in the sector, including licensing.

Speaking to the Institute for Policy Research, Livingstone said: “We must actually intervene into the private rented sector.”

Livingstone said: “No tenant in the private rented sector should have to pay more than one third of their wage in rent. What London needs is a London-wide non-profit lettings agency. So I can announce today that I will work with other stakeholders to establish one that can start to make a change in the private rented sector for the better. It will put good tenants in touch with good landlords across the spectrum of private renting so that both can benefit from security of tenure and reduce the costs of letting. The new agency would get to grips with the problem of rogue landlords and tackle a series of issues on accreditation, inspection and enforcement, licensing and energy efficiency, as well as tenants’ deposits protection. Through this work we will challenge the scandal of rip-off agency fees, horrific standards and the daily experience of disputes over deposits in the private rented sector. In the coming weeks I will set out more detail of how this new arm of the Mayor’s role will work.”

The response from the current mayor of London, Boris Johnson, reckons rent controls would be devastating and he would tackle things much differently.

Mr Johnson has said as London Mayor he would introduce a new London-wide accreditation scheme for all landlords.

A new London Rental Standard, which would accredit private landlords. He would also introduce a ‘rent map’ to give tenants more information on fair rents in their local area.

But he will not countenance rent controls, hitting back at election rival Ken Livingstone’s plans and saying they would be ‘devastating’ for the sector.

A spokesperson for the Mayor said: “The proposal of rent controls would be devastating for the sector. Rent controls were ended in the UK because they were counter-productive. Whatever the ideological appeal, the mayor does not have the power to introduce them, and even if he did, they would be devastating for the construction industry. It would result in fewer homes being built and lead landlords to invest less in stock. Other major international cities such as New York are removing rent controls for precisely these reasons.”

But, chairman of the Residential Landlords Association, (RLA), Alan Ward was severely critical of both Livingstone’s and Johnson’s proposals. He said: “Livingstone’s call for rent controls is an old idea that never worked in the past. Until 1988, rent controls resulted in a shortage of supply and poorer conditions for tenants. Hardly a remedy for 2012. There is no doubt that rents in the capital remain far higher than anywhere else in the country, but the answer lies in improved supply.”

Mr Ward said of Johnson’s ideas: “With over 10,000 landlords in London already members of the London boroughs’ accreditation scheme, it would seem a waste of time and money re-inventing the wheel in this way. The Mayor should focus on supporting and encouraging existing accreditation schemes, freeing his office up better to target the minority of landlords who bring the sector into disrepute. This should be matched by a programme of serious tenant education, providing tenants with all the information needed to better hold their landlords to account for the service they provide. It beggars belief that some people spend more time assessing the state of a car they wish to buy than the homes they seek to rent.”

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