ARLA Propertymark is calling for referencing to be exempt from the letting agents’ fees ban.
In a note to member agents yesterday, chief executive David Cox said: “Tenant referencing must be exempt from the ban.
“The reasons for this are manifold. Referencing ensures that tenants do not take on a financial commitment which is unsustainable. Referencing reduces the risk of tenants falling into rent arrears which often results in them being evicted and subject to County Court Judgments.
“This can lead to a drop in credit rating and difficulty sourcing other rental properties or making successful mortgage applications, along with difficulty sourcing low-cost credit from mainstream suppliers.
“Quality referencing helps to reduce homelessness.
“While it is frequently said that referencing is available for a few pounds, this is not accurate. Our primary research has shown that agents list referencing as one of the single most time-consuming aspects of the role.
“Referencing is not simply a case of sending a form to a third party – it is frequently a complex process which is in part required by law (Right to Rent checks).
“Referencing involves ensuring forms are completed properly, making requests to referees and guarantors, checking a tenant’s credit history, liaising with an external referencing company, collecting employment evidence and information from previous landlords, checking passports or other documentation, storing copies securely and scheduling and carrying out follow-up checks where legally required.”
ARLA Propertymark says that its research shows that agents take an average of eight hours to complete referencing checks.
The organisation is continuing to press for an extension or suspension of the Government consultation into the proposed ban.
ARLA Propertymark is also, “in light of the frustrating context created by the Government”, inviting members to give their input into the consultation response that will be submitted.
On Friday, during an interview on BBC Radio 4′s Today programme, housing minister Gavin Barwell made it clear that the ban would go ahead.
* Separately, and further to our story yesterday, TPO says that tenants will still be able to seek redress when the ban on fees charged to tenants comes into force. There has been speculation that because tenants will no longer be agents’ customers, they would forfeit their right.
However, ombudsman Katrine Sporle told EYE: “There will only be a gap in redress if landlords cease to use agents and decide to self-manage their properties. Where there continues to be a contract between the landlord and the agent, tenants can continue to raise complaints, where the agent has not carried out their contractual duties.”
Sporle also said that the issue is being raised with DCLG as part of the consultation exercise.