The Association of Residential Letting Agents has repeated it call for the government to ban up-front letting agent fees at the start of a tenancy and instead spread the cost across the first six months of a rental agreement.
New research conducted for the association reveals that 42 per cent of letting agents expect that a full ban would result in reduced staff numbers in the medium to long term, while 62 per cent of agents think that a full ban will cause the quality of rental properties to decline.
The research, completed by 1,008 letting agents, explored the impact that a full ban will have on tenants, landlords, agents and the wider housing market. The analysis also looked at the purpose of letting agent fees, which cover a huge range of tasks, checks and legal requirements; such as conducting credit checks and collecting references which can take up to eight hours on average.
The findings show that letting agents expect the condition of properties to worsen, and 61 per cent also expect property management standards to drop.
By spreading the cost of fees, rather than banning them entirely, letting agents will be able to maintain current service levels to tenants. The spreading of fees will also make tenancies more affordable to tenants, as it means they will only need to find the deposit and the first month’s rent, ARLA insists.
The association also claims that tenants would only pay for fees over the first six months of a tenancy, rather than subsequent years, meaning that there would be no additional cost for renewing a contract.
ARLA’s research shows that letting agents overwhelmingly expect rents to rise if a full ban comes into force.
“When the Chancellor announced a full ban on letting agent fees in the Autumn Statement, we called the measure draconian and a crowd-pleaser. We stand by that. Nonetheless, we believe that ARLA’s proposal to spread the cost of the fees across the first six months of the tenancy will guard against the numerous unintended consequences of a full ban while also finding a solution that works best for the consumer” says David Cox, ARLA managing director.