x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button
award
award award
award award

TODAY'S OTHER NEWS

Fees Ban is here: but will it achieve what the government wants?

The Tenant Fees Act comes into effect in England tomorrow - but a senior lettings expert is questioning whether it will have the effect the government intends.

Glynis Frew is the chief executive of Hunters - the long-standing franchise agency that has as its chairman the Conservative MP Kevin Hollinrake - but she has nonetheless made an outspoken attack on the government for the policy. 

Last September Hollinrake spoke during one of the House of Commons debates on the Tenant Fees Act - or Bill as it was then - and at the time said: “The legislation will cost me more than I care to think of” but he added:“A tenant chooses a property, they have no choice about who their lettings agent is…There is not currently a free market here.”

But now Frew, in a statement released to mark the introduction of the fees ban and deposit cap tomorrow, says: “A recurring theme seems to have emerged over the last few years when it comes to government housing policy – good intentions bringing undesirable consequences. It’s frustrating because the industry and government are actually joined up in their desire to ensure that tenants get a fair and honest deal.” 

She continues: “A small number of rogue agents or landlords have charged mind-boggling fees over the years, that’s a sad reality, but that’s not a fair reflection of the industry as a whole.

“Agents and landlords proposed and would have embraced fee caps, but the government chose to reject those calls. It now needs to ask itself if this legislation is going to do the job it is intended to do.”

She then asks the question that many across the industry have posed: “Will this really benefit tenants? Market forces will take their natural course and rent increases are likely to follow in many locations, especially where tenant demand is strongly outstripping supply.

“The British have a strong emotional relationship with property and yet in a period of four Prime Ministers, there have been 17 different housing ministers spanning 20 years. 

“Not one has managed to build the number of homes the country is purported to need to satisfy demand and keep property affordable. Maybe, just maybe, if we had a housing minster that stayed long enough to understand the housing industry and the market, we would all do so much better. Housing should not be a vote winning political football, it’s far too important than that. To all of us.”

Here’s a reminder of what the Tenant Fees Act means when it comes into effect tomorrow:

- Agents and landlords must not require tenants to make any payment or loan as a condition of the tenancy and this includes fees for securing references or inventories or any other front-loading of costs;

- The only payments permitted to be charged to tenants are rent; a refundable tenant deposit of no more than five weeks’ rent (where the annual rent is less than £50,000) or six weeks’ rent (where the annual rent is £50,000 or more); and a refundable ‘holding’ deposit of no more than one week’s rent and a payment by the tenant in the event of their default, such as a late payment or breach of the tenancy agreement. Anything else is regarded in law as a “prohibited payment”;

- From June 1 this applies to new tenancies only; from June 1 2020 this will apply to all tenancies;

- Holding deposits must be refunded to tenants within seven days of the tenancy agreement being completed, or within 15 days of taking the deposit if the agreement is not completed for reasons within the agent’s or landlord’s control;

-There can be a small fee if a tenant requests a variation of the tenancy but this is limited to £50 unless additional costs can be shown to have been incurred;

- Local authorities, charged with enforcing the legislation, can fine an agent or landlord up to £5,000 for levying a prohibited payment.

- Local authorities can prosecute or impose a fine of up to £30,000 if an ‘offence’ under the Act has been committed, being where a landlord or letting agent has been fined or convicted for a breach within the last five years and commits a further different breach.

  • Paul Smithson

    NO will achieve high rents and less properties.
    SAME AS-There can be a small fee if a tenant requests a variation of the tenancy but this is limited to £50 unless additional costs can be shown to have been incurred;
    SO tenant wants to swap in a HMO, cost of referencing tenant and maybe guarantor, unregister old deposit and the reregister new tenants deposit , draw up new tenancy agreement and agree the inventory with new said tenant, so real cost of admin visiting property etc is nearer £200 and then you have to justify to tenant-and obviously the Landlord won't want to contribute-so the answer is Landlord says NO !

  • Emma Hamilton

    I'm hearing many landlords saying they will not rent to tenants with pets due to the deposit cap. What are your thoughts

    icon

    You could ask for a guarantor for any excess over & above the deposit incurred, or you could just insure against this (probably!).

     
    S l
    • S l
    • 01 June 2019 15:15 PM

    not many landlord trust insurance with their small prints and exceptions where these exceptions is mainly what the claims would be. so insurance is probably not the answer to your queries. The only security that would work would still be the deposit or perhaps default deposit?? I assume that is now redundant as well? no cleaning fees so what do we call it if the tenant does not return the property in the same clean state as it was given?

     
  • Suzy OShea

    Much as i love animals, I definitely think tenants living in shared accommodation should have no right to keep them. Its cruel to the animals which sometimes get left behind when the tenant moves on! i had that happen in my house.

    If the tenant is renting a whole house and garden, then this is between the landlord and tenant.

    perhaps you could apply two deposits one for the tenant and one for the pet for which the tenant has to stand guarantor and pay!

    S l
    • S l
    • 01 June 2019 15:17 PM

    what makes you think the tenant is going to pay even if he stand as guarantor? still have court costs to take them to court etc etc

     
  • icon

    No daily curry eaters, no pets, no UC, no one without id, bank statements, wage slips, proof of address, guarantors if students, advance rent if foreign students.

  • icon

    I don't think the government know what they want. This is just a knee jerk reaction because they think generation rent will vote for them. I have news for them. They won't!

  • icon

    On the bright side we in commercial property can look forward to an upswing as the BTL owners abandon ship and look to invest in a safer market with higher yields. Silver linings and all.

  • Paul Barrett

    There is nothing in the TFA which prevents a LL or LA stating that no prospective tenant will be CONSIDERED unless they have their own Tenant Referencing Passport.
    Of course this means if tenants don't bother then a LL or L A may not have many tenant clients.
    But somehow I doubt it.
    Savvy tenants will soon realise that one TRP works for everyone.
    Even better if the TRP qualifies them for RGI.
    LL and LA will give such tenants 1st choice over those tenants that aren't prepared to pay for their own TRP.
    Somehow I reckon with the desperate shortage of rental properties tenants will do whatever it takes to beat other tenants to suitable properties.
    Every tenant prospect has the RIGHT to NOT be considered by a LA or LL.
    I for one will not be willing to take on any tenant unless they show me a TRP no more than 2 month's old.
    It will not be a requirement of mine but if a tenant doesn't show me their TRP I won't consider them.
    Every tenant has the right not to be considered.

    icon

    It won't take long before there are some undesirable entrepreneurs who will be able to forge such documents.

     
  • Paul Barrett

    Retired Agent
    Yep fair comment though forgery exists now with creation of pay slips etc.
    So any form of referencing could be suspect.
    Personally I would accept a TRP from LRS.
    A risk I know but I know the TRP process is far more robust than other referencing.
    I'd take my chances with LRS

  • icon

    It’s just another link in the chain to Rent Control. Scotland did it in 2012 and now their is a bill going through the Scottish Parliament to introduce Rent Control as rents have soared.

    Who would have thought that if you put more money into customers competing for the same scarce resources that the price of said resource would go up.

    Paul Barrett

    I do wonder whether with rent controls LL will withdraw their properties from LA management so that they may collect the monthly rent in cash.
    The proper rent will then be paid NOT just the controlled rent!!!!
    Brown envelopes will be much used!!
    An issue I can see in Scotland is if the tenant only agrees to pay the controlled rent that a LL would have problems getting rid of that tenant.
    Any old tenant would be able to pay controlled rent.
    Will we see lots of LL wishing to move into their rental properties as the only way to get rid of a tenant who is only willing to pay controlled rent?
    I can see that this rent control situation will be the final straw for many LL and they will sell up.

     
icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up