UK Government to Ban Landlords’ Agents from Charging Fees to Renters
This is something that we’ve been saying should happen for a long time. So it was great news when the UK Government announced last Wednesday in the Autumn Statement that they would be imposing a ban “as soon as possible”.
The Chancellor, Philip Hammond said “In the private rental market, letting agents are currently able to charge unregulated fees to tenants. We have seen these fees spiral, often to hundreds of pounds. This is wrong. Landlords appoint letting agents and landlords should meet their fees. So I can announce today that we will ban fees to tenants as soon as possible.”
Agents work for Landlords so it is Landlords who should pay their fees. Agents do charge Landlords, but they also charge renters various admin fees for preparing rental contracts, referencing, credit checks and inventories. As previously mentioned by the Chancellor, often these fees amount to hundreds of fees – and they’ve been escalating as Agents increasingly realised that they were a nice, additional profit centre that amounted to “money for old rope!”
But they are unfair to renters. Landlords can choose which Agent to use. Tenants don’t have that luxury. Once a Tenant has chosen a property they have no alternative but to pay whatever fees are demanded by the Agent that’s representing that Landlord.
We are unimpressed by the argument that this measure will fail because Landlords will be charged these fees by Agents – and to compensate for this, they will simply put rents up, which will hurt renters.
Really? If the local market conditions allows Landlords to raise rents, they will raise them anyway, obviously. But they won’t raise rents if it’s going to hurt their interests by making a property unattractive against comparable rental homes. It is supply and demand that dictates rent levels.
And there’s strong competition amongst Agents to secure properties to market from Landlords. Landlords are likely to choose Agents who don’t pass on these flabby extra fees that Agents will no longer be able to extort from renters.
Furthermore, Agents in Scotland have been subject to a ban of this type since August 2012 and there’s no evidence that rents have risen as a result.
So we applaud this move by the UK Government and look forward to seeing the detail of the new legislation as soon as possible. A consultation will be published in January 2017 about the form of this ban.
In the meantime, we hope that reputable Agents will voluntarily put an end to charging these fees to renters.
If you have any questions about this upcoming ban, or if you’d like to consult with one of our Renter Advocates about your own situation, please CLICK HERE for our contact form.