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NALS calls for cap instead of ban on letting agent fees

The National Approved Letting Scheme (NALS) has called for a cap on excessive letting fees charged to tenants, instead of a blanket ban. 

The organisation, which represents letting and management agents, says a cap is an appropriate way of curbing excessive fees, which are only charged by a minority of agents. 

Chief Executive of NALS, Isobel Thomson, says it is time for the industry to act before an outright ban becomes a 'real option' for the government.

The Renters' Rights Bill, which proposes an outright ban on fees charged to tenants, is currently making its way through parliament – having received two unopposed readings in the House of Lords.

Earlier this year, a petition against fees received widespread media coverage and was supported by Baroness Grender. The petition, 'Make Renting Fair in England', now has over 250,000 signatures.

Thomson says that efforts to explain to the media and the government why upfront fees are often fair and necessary are 'hampered' by 'sensationalist headlines' which are sometimes based on 'spurious research'.

"We believe a cap is an appropriate way of curbing any excessive fees and offering protection to the consumer," explains Thomson.

"By offering a cap calculated and enforced at a local level, we still allow agents to be paid for the work they do in setting up a tenancy, while also ensuring a fair, set rate for tenants."  

The NALS chief is now urging all industry bodies to come together to offer this 'proper solution to an all out ban'.

Last week, research from Upad claimed that the majority of tenants would rather a rent cap than a ban on letting agent fees

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    A cap makes perfect sense. knowing my local market our fees are below what everyone else charges and a country mile below what some charge in the wider area.

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    You'd think the likes of Shelter and Generation Rent etc, plus the Government would have enough common sense to realize that a ban on agents fees, would inevitably pass the costs of referencing etc onto the landlord, which in turn would result in landlords increasing the rent to compensate for costs they would now have to bear. The year on year increased rental costs will make tenants far worse off than if they paid the agents fees at the beginning of the tenancy. This I believe is exactly what has happened in Scotland.

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    A cap is the obvious solution, a prospective tenant should expect to pay for their own credit checks and referencing.

    Many letting agents are operating on low margins in an over competitive market, these costs have to be covered, and agents & landlords will just add these costs into the rents.

    Lets not go back to the 70's and strangle our private rented sector...lets face it Central Gov. has done very little to increase the supply of private rented properties....and without providing subsidy to public / social housing sector....the charges made by your average regional letting agent will be far below the salaries of many Council officials or Housing Association housing officers.

    And as for turning over Build to Rent schemes to city led companies...watch efficiency disappear completely...and costs rise.

    The Gov will never get a leaner more cost effective model to manage private rented property than than the regional letting agent.

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    The cap on fees does make sense, and would deter unscrupulous tenants from applying for several properties unbeknownst to the agent or landlord, laying the abortive costs at the door of the agents should they let you down.

  • Nichola Taylor Cockayne

    I agree, a cap would be most sensible. There's already been reports of rising rents and skyrocketing costs, simply as a result of the tax issue earlier this year and a lot of landlords shedding their rental property. There's less now. It's not making it easier for people to get on the property home owner ladder, it's making it harder to rent! Banning letting fees is like saying to the gas engineer, I'm not paying you to do a gas safe but you have to do one! Let's be sensible here, and regulate the market with an achievable and fair cap on fees.

  • Vince Spangenberg

    In Scotland it is illegal to charge tenants anything apart from deposits and rent. This obviously means that costs associated with credit checks, referrals, etc, have to be absorbed by the letting agent or charged to the landlord. Seems a shame that potentially unscrupulous tenants get away with this scot free whilst others have to pay through no fault of their own. Why can't we have a 'cap' up here in Scotland too?

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    Talking about the law in Scotland? Lots of unreliable tenants manipulate the weakness of the law in Scotland not to pay rent, and to sublet the property illegally. In Scotland, landlords have to be responsible for tenants' unlawful behaviour. Agents don't care, because landlords will be punished when the agents manage everything for landlords. What I am saying is, do not try to control something we can not control. The market will decide the fees itself. Try to control something we can control, that is to review the law in Scotland and to make it fair and justice. I don't think Scotland will be strong and prosperous if the place is full of irresponsible tenants who are over protected and don't need to pay anything. The new trick for the tenants in Scotland is to get a tenancy agreement signed and move in, stay for three months free of charge, and move on to the next place, because the check is invalid.

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