The Tenant’s Fees Bill announced in The Queen’s Speech, which proposes banning landlords and letting agents from charging letting fees, has been slammed by an industry expert as the PM Theresa May “clutching at straws”.
The details of the ban - which was initially announced last November during the chancellor’s Autumn Statement - are still very unclear. However, says LandlordToday, the move is obviously aimed at shifting the cost of letting agent fees on to landlords.
The feeling in the industry is that this change of legislation will leave landlords with little choice but to further push up rents, as letting agents look to pass existing tenant fees onto landlords.
David Cox from ARLA Propertymark commented: “A ban on letting agent fees will cost the sector jobs, make buy-to-let investment even less attractive, and ultimately result in the costs being passed on to tenants.
“Research conducted earlier this year shows that referencing checks undertaken by agents take, on average, eight hours to complete. It is therefore right and proportionate that the industry is recompensed for this work, which benefits tenants. The research also showed that letting agents stand to lose around £200m in turnover, costing the sector 4,000 jobs.
“Landlords themselves would lose £300m, meaning they may seek to cover their losses by increasing rents to tenants.”
Danielle Cullen from StudentTenant.com, said: “The inclusion of the letting agency fee ban in the Queen’s speech does nothing but reeks of desperation.
“This is deeply concerning for all of the small businesses who will not be able to maintain revenue without these fees, but also for tenants who will now have higher living costs as no rent cap has been mentioned as it was by Labour in their manifesto before the election.”