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Fees ban will leave the market in limbo

Sally Walmsley
Written by Sally Walmsley

Plans to ban fees paid by tenants to both landlords and letting agents will leave the market in limbo, according to the RLA.

The Queen’s Speech revealed the plans, first announced by the chancellor in November, will now be published as a Draft Bill for further scrutiny.

This comes after a consultation on the proposed ban closed on June 2.

The Draft Tenants’ Fees Bill will include:

  • Measures to ban landlords and agents from requiring tenants to pay letting fees as a condition of their tenancy.
  • Measures to enforce the ban with provision for tenants to be able to recover unlawfully charged fees.
  • A cap on security deposits at one month’s rent and a week’s rent for holding deposits.

Evidence shows most RLA landlords either charge nothing at all or a minimal fee of around £25 for necessary checks.

However the association is extremely concerned about plans to cap deposits, which it believes will reduce flexibility within the sector. It believes that landlords will be less likely to take a chance on tenants who are not obviously financially secure as, under the new plans they will have no ability to mitigate the risks.

Plans to cap deposits cames as a surprise when they appeared in the government’s consultation documents, as they had not been part of any earlier discussions. The decision to set out details of the proposed cap so soon in the process is deemed even more worrying.

The RLA believes the government could make a measurable improvement now, without legislation, by bringing in a fixed range of fees for agents.

RLA Chairman, Alan Ward said: “A Draft Bill serves neither tenants nor landlords, and leaves the market in a state of unhelpful limbo.

“Rather than proceeding with draft plans that will be eclipsed by battles over Brexit, Ministers could instead use powers they already have to introduce a fixed menu of fees which letting agents would have to publish.”

In its official response to the fees consultation submitted earlier this month the RLA said it feared landlords would be left to pick up the bill if the government introduced a blanket ban.

It warned that with some agents picking up as much as 30% of their income through tenants’ fees it was inevitable that these would pass them on to landlords.

 

The impact of this when combined with pressures such as tax changes and licensing fees would mean costs would be likely to filter down to tenants, through increased rents.

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Communications Manager for the RLA and award-winning Editor of RPI magazine. With 16 years’ experience writing for regional and national newspapers and magazines she is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and editorial content for our media partners.

She issues press releases promoting the work of the RLA and its policies and campaigns to the regional and national media and works alongside the marketing team on the association’s social media channels to build support for the RLA and its work.

3 Comments

  • Good article. The limitation on deposit will lead to more disputes at the end of the tenancy, more claims through the courts and, worryingly, it prejudices tenants with pets. Landlords traditionally have taken 2 months deposit if they allow a tenant to keep a pet in the property (on the basis that pets can cause more damage and carpets/curtains etc & will require “de-petting” at the end of the tenancy). I suspect that this will reduce the number of rental properties available to tenants with pets. Which is a shame.

  • This will lead to more landlords selling their properties, they are already ‘bashed’ with having to carry the cost of arrears, court fees and properties being trashed. Referencing/right to rent checks costs agents money to carry out to ensure that the prospective tenant is above board, marketing a property to let, viewings and time taken putting ‘lets’ together costs man hours too. So landlords have to cover these fees as well now? This will lead to a larger housing problem, something has to give, landlords mostly have mortgages to pay against let properties and they are not given anything financially for filling the the ever increasing lack of housing that successive governments have failed to provide for our increasing population

  • Once again a government approach that is completely out of touch and disjointed. The proposals will only cause more turmoil in the rental market and impact on tenants, well done! How about you the democratically elected government starting to listen?

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