The Potential Impact of The Proposed Ban on Lettings Fees
There is still some uncertainty surrounding the proposed ban on lettings fees. It is alleged, via the Draft Tenant’s Fees Bill that landlords will soon not be able to charge tenants a lettings fee as a requirement of their tenancy.
Following the recent Westminster Hall debate on 6 Sept 2017, a number of issues were brought to the table. The debate comes at a time of the year when according to the TDS, we are approaching the busiest day of the year for tenancy ends. This is expected to be the 3rd Thursday in September - Thursday 21st September 2017.
Several concerns surrounding the proposed ban of lettings fees were cited:
- - Rental prices could increase as landlords look to recover their costs elsewhere. Letting agents could pass these fees on to landlords who may then recover these costs from tenants through higher rents. However, it is believed that any anticipated rent rises are going to be less than current letting fees.
- - There could be an impact on jobs as letting agents scuttle to manage their finances better following the fee cull.
- - Visibility of letting fees and the fact that 12% of agents failed to disclose their fees last year.
- - A variation of letting fees being charged – from £6 to £325.
Concerns were also raised on the quality of rental stock. Student lets where some landlords were holding deposits in personal accounts were discussed too.
In conclusion, a ban of letting fees will go ahead as part of the “put homes first” and “help people now” mantras. As a letting agent or landlord, you should review your portfolio and see where these costs can be absorbed. You should also ensure that any fees that are currently being charged are transparent and are fully visible to prospective tenants.