Rental agent fees

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My personal first choice of charity to support is usually Shelter. They do amazing work. Many people think that they work with the homeless to get them under a roof, but in fact many of their campaigns are to make the housing market fairer for those already in a home.

Current campaigns, for instance include building more affordable housing, fighting the incredibly unfair bedroom tax and dealing with rogue landlords.

But I have noticed that some people are tweeting about a campaign that they currently have to end letting agent fees. This tweet from @KellyMarieLD is a good example:

1 in 7 renters who used a letting agency paid more than £500 in fees. Sign @Shelter’s petition #endlettingfees http://t.co/Mzbjth4HUO

— Kelly-Marie Blundell (@KellyMarieLD) July 2, 2013

This particular campaign, I think, is ill thought through.

Let me just be absolutely clear: estate agents are indeed not a nice lot, are venal and generally a dishonest, short-termist, hateful bunch of BMW Mini-driving oiks.

But regardless of how much we dislike them, they perform a role (however inefficiently) in the process of linking the UK’s 9 million privately renting tenants with their landlords. They perform various services for the landlords, such as showing prospective tenants round flats  (compact and bijou, Mostyn, compact and bijou), performing credit checks, gathering references etc. They might do a generally slapdash and awful job of this and charge an absolutely scandalous amount for it, but that’s a separate matter. The market has driven itself to the bottom and stayed there for many years; but these services are provided, however badly. And for that, these bottom-feeders do require some recompense.

Unfortunately.

At the moment they are paid by the tenants. The market has set the rate for these services, however high and profiteering that may be. This is the value that the market has set on the agents’ time and effort.

Now Shelter feels that these fees are totally unfair and should be made illegal.

But if the tenant doesn’t pay them, the agent will still want to be paid and the only other party in this contract is the landlord. But the landlords themselves are a profiteering bunch of capitalists. What they will do with costs is incorporate them into their financial model, add an uplift for opportunity cost of that money and raise rents accordingly.

The landlord, rationally, will spread this over the normal tenancy (probably 12 months), but not give a discount after this.

The result of Shelter’s proposal, I suggest, is likely to be an increased overall cost to anyone renting more than 12 months, who will effectively be paying those inflated fees on an annualised basis, but to the landlord instead of the agent.

Now I know that fees are illegal in Scotland, but have not seen any good studies on the effect on long term rents, compared to the similar time period in England where fees are still allowed.

But I know one thing for sure; those agents aren’t going to do that work for free and in the end the only income stream either the landlord or agents have is the tenants.

Maybe the solution is not to ban the fees, but better regulate landlords and agents, and set some centralised fees to provide equilibrium in the market?

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What is wealth?

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My good buddy Michael Story posted the following tweet this morning:

World Income Inequality: The poorest 5% of Americans are richer than the richest 5% of Indians marginalrevolution.com/marginalrevolu…

— Michael W Story (@MWStory) June 6, 2013

Which started a little debate as to what ‘wealth’ means.

Which of these following 4 people do you think is the ‘wealthiest’?

a)      A person who earns £100k per year but due to circumstances has no outgoings. They pay no tax, no mortgage or rent. Their food is paid for. Every penny of gross income is disposable income.

b)      A person who earns £100k per year but due to circumstances has (reasonably) unavoidable outgoings in excess of £100k per year. Their net income is below zero.

c)       A person who has no income but has gross assets worth £1m. They have liabilities (debts etc) in excess of £1m. They must generate income from or divest themselves of assets in order to live including servicing liabilities.

d)      A person who has no income but has gross assets worth £1m. The assets are entirely unencumbered. They have no liabilities. They must generate income from or divest themselves of assets in order to live.

Many articles, including the one linked in the tweet above treat gross income as synonymous with wealth.

They are not.

Wealth is a measure of net assets, not of gross income. To conflate the two is pure hyperbole. Just because one has a high paying job or living in a big house does not make one wealthy.

Pret complaint

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Last week, it was reported that Pret a Manger withdrew the ‘Virgin Mary’ flavour of crisps due to complaints from a small group of Catholics organising a letter writing campaign. It has been suggested by some wags that the crisps were really withdrawn because they may make women pregnant.

I first heard about this on Twitter when Andrew Copson of the BHA brought it to his followers’ attention. I took it upon myself to complain and received the following polite response from Clive Schlee, the Pret CEO.

Dear Tweety

 Thanks for your email.   I made the decision to pull the crisps because they were upsetting growing numbers of our customers and that’s not smart for any business.  It was a tight decision and I did what I thought was right.   We will bring back the flavour under another name later.

 With best wishes

 Clive

So I took the opportunity to reply.

 

Clive,

Thanks for your email.

I trust that you appreciate that in a modern and secular world, as a liberal, I do not advocate bowing to the demands of vocal minority religious groups. Whilst I accept that as an entity Pret should be free to act in the perceived best interest of its shareholders, I strongly feel that such a precedent is not a positive one for any company to promote.

As we saw in the equal marriage debate in parliament, when vocal minorities get traction and are given acceptance, the result is an increase of hateful homophobia, racism and other bigotry. It is only by telling such groups that their views are not acceptable will we improve society for everyone.

By giving in to the narrow-minded bigotry of Nick Donnelly & his ‘Protect the Pope’ website, you have ensured that I and other secular humanists will be happy in permanently taking our business elsewhere.

I expect that you hope that you will be rewarded in your bonus this year by getting more profit from the shrinking group of child-abuse-defending Catholics than you receive from the growing group of rationalists & humanists in this country. Good luck with that business plan.

To make it very clear, my concern is not the availability of a particular flavour of crisps, but the support you show for bigots crushing free speech.

Until your company publicly restores the name of the snack, I will vocally support other businesses that don’t publicly have such knee-jerk reactions against liberalism every time a petulant minority group starts a letter-writing campaign.

Yours etc,

Tweety Bunny

Letter to Sarah Teather

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This being a copy of an email that I sent today to Sarah Teather on the matter of her vote in parliament yesterday on equal marriage.

Sarah,

I am writing to you as a party member to let you know that I am incredibly disappointed by your vote against equal marriage.

I note that you have already received a high volume of feedback on your Facebook page, and I am sure that mine is not the only email, phone call or letter that you will receive on the matter.

Many of these responses to your position have been rather personal in nature. Normally such attacks make me uncomfortable. However I must say that in your case these feel justified given that your post excusing your vote is entirely a personal attack on the freedoms for homosexuals to marry.

I wish to take issue particularly with your position on two points, which though not particularly original, jar with me as a grassroots party member and you being a member of parliament for the Liberal Democrats. The two points may summarised by the fact that your stance is neither

a)       Liberal; or

b)       Democratic.

Liberalism

I don’t feel that I need to explain to you why your position is illiberal – you admit so much yourself, where you clearly struggle with your internal bigotry and the ideals of your parliamentary party and the social liberalism uniting the core of the membership.

It is fundamentally illiberal of you to deny the rights of a group of people based on their sexuality access to declare their love for one another in a state-sanctioned manner available to others. It is no less illiberal to legislate against the social rights of people by the colour of their skin or their gender. Such racism or sexism wouldn’t be acceptable for a member of parliament, why should you expect your homophobia to get away unchecked?

I won’t belabour this point, but feel that the general strength of feeling against your religious conservatism is expressed very well in this blog by Lee Griffin. He gives you a jolly good fisking, exposing your inconsistencies and lack of reason.

Democracy

The basis of our parliament is one of representative democracy. You were elected by the people of Brent with a slim majority of 3.0% – only 1,345 people. They asked you to go to parliament, on a liberal manifesto, to represent their views. Do you think that there are fewer than 1,345 gay people in your constituency?

Now it may be that in your particular constituency you know that there is a very strong conservative religious majority, but a) I doubt that you have conducted a sufficient poll to provide evidence of this, and b) this is not the argument you make in your excuse for voting ‘no’.

A June 2012 YouGov survey shows highly accepting attitudes of the British population toward LGBT rights. The report found that 71% are in favour of same-sex marriage. Without good contradictory local data, I think this is a reasonable basis to state that at best, your attack on the rights of homosexuals to declare their love through the medium of marriage to mirror that of less than a third of your constituents.

Putting your personal views ahead of the will of your constituents and that of the UK population as a whole, goes wholly against the spirit of representative democracy. By willfully entering parliament, knowing that you were unable to put aside your own homophobia, and making that the vote on historic record for the people of Brent exposes that you should be declared unfit to perform your job.

The stance that you and your fellow 174 (mostly Tory) bigoted chums took in parliament do expose the strong need for another Lib Dem policy to be enacted though – that being parliamentary reform; in your case, the right of recall.

As you clearly feel that your role as an MP is to act like an emperor, I shall leave you with the words of one of history’s greatest; the stoic Marcus Aurelius, to remind you that if your God ever asks you to perform hateful acts in His name, you should ignore His temptation and respond to the world with love.

 “Live a good life. If there are gods and they are just, then they will not care how devout you have been, but will welcome you based on the virtues you have lived by. If there are gods, but unjust, then you should not want to worship them. If there are no gods, then you will be gone, but will have lived a noble life that will live on in the memories of your loved ones.”

Yours aye,

 

Tweety Bunny