The Chancellor’s announcement in the Autumn Statement to ban letting agent fees for tenants was political rather than practical.
Unfortunately, reputational damage had been done to the lettings industry by a few shark practitioners, charging tenants unfair and extortionate fees. However, most letting agents provide an invaluable service for tenants, which is charged to them fairly. Agents often show tenants around prospect properties, at no cost and without a commitment to accept any of them; they continually filter and deal with numerous queries raised by a tenant in the lead up to a successful application, as well as arranging referencing and assisting with the move-in and handing over administration. The administrative work is significant to deal with, which government legislation has greatly added to, such as identity checks for Right to Rent. All this takes time and involves a cost.
With the banning of tenant fees, the landlord would have to bare these costs and this latest move comes on top of a series of government measures introduced over the last year, which have already added additional pressure to the buy to let market. Next year’s tax changes, the removal of wear and tear allowance, extra stamp duty, the first step to phasing out mortgage interest relief and relief restricted to the basic rate are all hitting buy-to-let landlords, which is likely to push up rents in the short term. However, we should not forget that the rental market is ultimately driven by supply and demand and an equilibrium must be maintained, so the natural conclusion is that landlords will foot the bill in the long term.
We have a housing crisis and this is just another reason for landlords not to invest. Instead of an outright ban, what is needed to protect tenants is an industry cap or a standard tariff of fees with full transparency on what the fees cover.
Notes to editor
Andy has been involved in Residential Lettings and Property Management (Sales and Lettings) since 1994. He has gained invaluable hands on experience and knowledge throughout each new chapter, which has created the platform and opportunity for rapid career progression in various challenging roles, including managing many large scale projects with previous employers commensurate to operations aligned with the Private Rented Sector (PRS).
In 2014, Andy joined Allsop Letting and Management as Managing Director and has overall responsibility for the business and is entirely focused on now driving the future strategic direction of the company.
Andy is a member on the British Property Federation (BPF) Residential Committee Board and is also a qualified member of the Association of Residential Letting Agents (ARLA).
The posts on this blog are provided ‘as is’ with no warranties and confer no rights. The opinions expressed are the author’s own and do not necessarily represent those of their employer.
If you would like to get in touch with Andy, please contact him:
email@example.com or +44 (0)207 344 2683