A Birmingham agent has branded the government’s draft Tenant Fees Bill - which proposes a ban on letting agents’ fees on tenants - as “a kick in the teeth” for the industry.
“We need the government to take into account the views of lettings agents across the country, before it goes ahead and introduces this Bill. This will do such damage to the residential sector, and especially to tenants in the long term” claims Andy McHugo, lettings manager at agency James Laurence.
“The tenants referencing costs in particular are essential to ensure the tenant has reliable references, and is able to pay the monthly rent and other associated costs. It is a prudent approach to take.
"Charging the landlord even more to carry out these checks will lead to rent increases, as Scotland has seen after it introduced the ban back in 2012. Hitting a tenant harder in the pocket is exactly what the government wanted to avoid, but it will be the inevitable result.
"Without these fees many landlords will be at risk. Whilst there will be questions raised about the agent absorbing the costs, why should landlords be out of pocket for credit checking and referencing applicants who may fail the checks, change their mind about becoming the landlord’s tenant or even take advantage of the reduced obligation by applying for multiple properties?”
Under the proposed legislation tenants can be asked to pay only their rent and deposit. It will also limit holding deposits to no more than one week’s rent, and security deposits at no more than the equivalent of six weeks’ rent.
The Tenants Fees Bill will also prevent letting agents from double charging both tenants and landlords for the same services and local authority trading standards teams will be charged with enforcing the ban.