City investment consultancy Jefferies has calculated the impact on landlords if the country’s second largest agency group - LSL Property Services - distributed fees currently levied on tenants on to landlords instead.
Yesterday LSL, which includes high street brands Your Move and Reeds Rains, reported to shareholders that its underlying operating profit for 2016 would be in line with expectations. Lettings revenue grew by seven per cent in the first 10 months of 2016.
Now City consultancy Jefferies - which has praised the LSL results in the light of Brexit and the economic uncertainty - has used LSL and Direct Line data to calculate what may happen once the Autumn Statement pledge of “banning” agency fees on tenants is conducted.
“If all the tenant fees were passed on to landlords, the average rent across England and Wales of £887 per month, would only need to increase by £8.65 per week for the landlord to cover additional charges of £450 over a 12 month tenancy” says two Jefferies analysts, Anthony Codling and Sam Cullen.
“According to Direct Line's landlord insurance team, the average tenancy lasts 18 months, suggesting that a rental increase of around £5.75 per week would cover the £450 additional costs” they say.