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Letting fees ban still unlikely to be introduced until 2018

The government’s Housing White Paper may have made many broad pledges aimed at the private rental sector, but it still remains vague on progress on the banning of letting agents’ fees in England.

The measure was introduced in the Autumn Statement last November but little progress appears to have been made on a specific timetable.

In the White Paper the government writes about the subject:

“Where there are concerns, these tend to focus on affordability and security. In the long term, building more homes will help with affordability, but renters often face upfront costs including fees charged by letting agents to tenants. 

“Tenants have no control over these fees because the agent is appointed by and works for the landlord. This is wrong. 

“The government has already introduced transparency on fees. We will consult early this year, ahead of bringing forward legislation as soon as Parliamentary time allows, to ban letting agent fees to tenants. This will improve competition in the market and give renters greater clarity and control over what they pay.”

The Royal Institution of Chartered Surveyors has already suggested that there are two probable routes to a ban’s implementation - full consultation and primary legislation, which would be unlikely to be completed within 2017 or what it describes as “curtailed consultation and secondary legislation under existing statute” such as Competition & Consumer Regulations, which might be more possible within 2017. 

The vagueness of the timetable outlined yesterday, combined with the government’s heavy Brexit workload, suggests that a ban is now unlikely to see the light of day in England until next year. 

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    The ban on letting fees in Scotland has driven rents up by £147 per month.

    Average letting fees are a one of charge of £223.

    So for a twelve month tenancy tenants will pay an increased rent of £1,764 to save £223.

    This has been a complete own goal in Scotland and even Shelter admit that rents went up before stabilising.

  • Mark Hempshell

    Fully agree yes. Instead of tenants paying the fees up front they will be paying them hidden in the rent month after month after month. Tenants who move often might benefit I suppose, but this hardly sits well with the idea of 3 year tenancies - those people could end up paying the most.

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    Are all Letting Agents contacting their MPs to explain this? Its no good shouting about it on here, only industry people will see these comments. We can agree it all we like, it WILL happen, its way too much of a vote pleaser to be disregarded now. What we need to negotiate are what the allowable costs that can be passed to tenants will be. Not a fee, a product. Do tenants want an inventory? If they do their own are these going to be allowable by the deposit schemes? What about tenants who 'commit' to more than one property then drop out on moving day? What about references? I understand tenants can apply for their own, these needn't be unacceptable if they are from the renowned referencing companies, but will there be proof that they are not faked or amended? In which case the reference companies will need to charge more, so they will perhaps liaise with set agencies and offer a 'kick back' or commission, there are a number of questions that are not answered with a downright ban, and we should all be lobbying our own MPS and relevant recognised national bodies.

  • Deborah Woolford

    Assuming there are many government officials who are Landlords. How on earth do they think we are going to properly reference tenants if the tenant is not expected to pay a fee. Surely this leaves the field wide open for tenants to view as many properties as they want and to make an offer. The Landlord then pays for the tenant to be referenced and guess what the tenant changes his mind. My landlords will be out of pocket very quickly. We already have to ensure Right to Rent Checks are carried out, doing the job for the Government where they havent got enough people doing the necessary checks as well as supposedly reporting a tenant if their documentation is not in order to the Home Office. Have you ever tried to report this ? its a joke. Even our boys in blue cannot get through quickly to deal with this. Mr Hammond is not thinking this through - I feel a De ja vue moment coming on - when the prescribed notices were first introduced. We were ready but the government were not !!!! I am all in favour of ridding this country of over excessive fees charged to tenants but at what cost I ask myself. Grrrrrrrrrrrr

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