It’s a familiar story for anyone who rents out a property. You go to an agent. The agent wants a management fee to collect rent and look after the house.
Then a letting fee to do much the same thing, an admin fee, renewal fee, gas safety fee – the list is endless.
Why should ordinary people care? Well, it’s the opinion of Northampton Borough Council that agents are pushing up rents, pricing ordinary people desperate to find a home out of the market – and sometimes out of the town itself.
This is why the council has set up Guildhall Residential Lettings. A social lettings agency, it is in effect a local authority intervention into the housing market, offering kinder terms for tenants and bringing hundreds of empty homes into use for vulnerable people – sometimes those on benefits – who are often shunned by landlords.
The agency will work directly with landlords to cut out the middlemen of agents to improve standards and make it easier for people to live in affordable private rented accommodation.
Councillor Stephen Hibbert (Con, Riverside) said: “We’re going to target the people who are struggling to find a home, so it will help people in need like the disabled.
“Once the landlord knows they are on benefits, they tend not to take them on board. We will be willing to do that providing they can show a willingness to pay their rent through the benefit.
“We will take that risk off the landlords’ shoulders and hopefully this will attract the landlords to us.”
The scheme is not-for -profit and will be initially funded up front by the borough council.
But this is all set to change once fees start rolling in through the letting process, to be reinvested.
Letting agents argue that the fees are necessary in order to find suitable tenants and that they are covering costs that they themselves are liable for.
The only fees chargeable to the tenant by J.P. Property Management, for example, are their initial administration fee and renewal of tenancy fee.
Julie Payne, of J.P. Property Management Ltd said: “At the end of the day, letting agents have to charge fees, firstly, to enable referencing of tenants to take place, which costs the agent through an outside source.
“This is to ensure that the applicant is able to afford the monthly rental of the property and has no adverse credit history, also their previous landlord would be contacted to ensure there were no rent arrears and that the property was maintained in good condition.”
Nevertheless, the borough council firmly believes it can provide a superior service without such charges, helping keep the cost of renting down for those who just cannot scrape the necessary funds together. Homelessness should fall as a result, the council believes.
Councillor Hibbert said, nationally, having no permanent address was becoming a problem. "Families are often forced to live in expensive bed and breakfasts, with the nearest sometimes miles out of Northampton."
He believes if the social lettings agency was not in place then the borough council would struggle to deal with the pressures of people living without a roof over their heads.
It is clear that Guildhall Residential Lettings is a good way of reducing a costly burden on the council.
But councillors should also be applauded for finding a solution that at last offers hope for perennially shunned tenants.