On the eve of yet another Watchdog expose into the corrupt and criminal underworld of Letting Agents, it seems that the connection between Letting Agents and utility companies is about to be highlighted.

While the description above is a little tongue in cheek there is no question that Letting Agents and Landlords are taking some stick in the media at present. The industry has been relatively shielded by the more ‘unpopular’ Estate Agents umbrella until recently but it seems that the public are more and more aware of Letting Agents operating in a separate sector of the market and thus open to criticism separate of that usually reserved for agency as a whole.

While an opportunity exists for the sector to undergo some constructive change, it seems that as per the norm it has descended into some kind of point scoring exercise. There is a lot to talk about but looking at the likely subject matter of this evening’s program is all we are looking for this post.

In a nutshell there are a number of utility providers that offer a commission payment for new accounts signed up by letting agents, or rather new accounts that are signed up as a result of an introduction by a Letting Agent. Naturally this is automatically perceived as some kind of sinister plot to take more money away from tenants, but as ever there are additional considerations to be made.

1. Dealing with utilities is pretty frustrating. In many cases tenants don’t pay them, lie about the date they moved in, change suppliers as often as they want or arrange for the installation of key meters which then run up debts. The Letting Agent needs to somehow keep up with this trail in order to ensure that the next tenant can move into a property without suffering any inconvenience as a result of the previous tenant.

In the past a tenancy agreement would state that tenants could not switch supplier. This was to ensure that the Landlord/Letting Agent knew who the supplier was and could deal with closing and opening accounts as easily as possible. However this was deemed unfair by the OFT which felt (rightly) that tenants should be able to choose whichever tariff and supplier offered the best value. For this reason most new tenancy agreements will have a clause that states that tenants should not change suppliers without providing the details of a new supplier in writing to the Landlord or agent.

Sadly this is often not the case and while Transco provides an easy way of finding the gas supplier, the electric supplier can be harder to track down.

You can see then that the prospect of a supplier that takes over all of this on your behalf and pays a commission for the privilege would be an attractive option for a Letting Agent. It reduces costs, administration and provides an additional income.

2. While the media will have you believe otherwise, most agents have a genuine interest in providing a good service to Landlords and Tenants alike. Believe it or not we don’t want to find additional sources of income and would rather just receive our standard fees. In the South East we have seen fees drop by some 30-40% as unregulated and inexperienced new agents come into the market and operate by undercutting other agents. This has led to the need to look for other sources of income.

However, that is not to say that any opportunity was to the detriment of clients. For example, Regal Lettings used a utility provider for a small period of time only on the basis that they provided a “guarantee” to beat any standard tariff on the market. In addition we still provided the tenants with the option to change supplier at any time if they so wished.

The moment it became clear that the supplier was providing terrible service standards and causing tenants a great deal of inconvenience we dropped the provider and have not used one since. However if a supplier came forward that could beat any other tariff as well as offer excellent service standards we may well consider it. (naturally tenants would retain the right not to sign up).

3. The media will dress this scenario up as greed pure and simple. While in some cases this will prove accurate, in other areas Letting Agents have seen their standard fees eroded significantly. Agents regulated by trade bodies will in most cases be offering a much higher standard of service but having to compete against one man band agents for fee levels. The old adage that “you get what you pay for” is having very little impact in the local area. An opportunity to save your clients money, reduce admin levels and regain some income seems a win win opportunity.

So hopefully you can see that as ever there are two sides to any argument. Unfortunately it seems unlikely that the program will have found examples of the above. More likely the agents will be successful and in the public eye in order to suit the reaction the program is hoping to achieve. It may well be that the scrutiny in this case is well deserved, but it would be nice to see some balance applied.

Regal Lettings are an independent Lettings specialist with offices in Rochester, Rainham and Sittingbourne operating in the North Kent area covering Medway, Swale and Maidstone. Established in 1999 we offer market leading levels of service to thousands of Landlords, Investors and Developers. We are committed to improving standards of Letting Agents across the Kent area at a competitive price.

If you want to know more why not contact rochester lettings on 01634 887 101 or gillingham lettings on 01634 370 777 or sititngbourne lettings on 01795 478 111. Alternatively visit our website www.regallettings.com

If you are looking for letting agents in Sittingbourne, letting agents in Rochester, letting agents in Gillingham, letting agents in Strood, letting agents in Chatham, letting agents in Maidstone, letting agents in Rainham, letting agents in Medway and letting agents in Kent, we can help! Regal Lettings Sittingbourne.