Posted : December 6, 2016

Outright ban on letting agents tenant’s fees – something had to be done!

The government continue their assault on the lettings market and following the announcement of the ban there has been some public acknowledgement by the industry that there was a problem which needed addressing.

Whilst we considered our fees to be reasonable, unfortunately for tenants and to the discredit of the industry many agents charge extortionate amounts. There was a lack of willingness within the industry to tackle an issue which has been running for many years, forcing the government to finally act under mounting pressure.

It is true that a landlord can shop around and choose an agent by comparing fees, whereas a tenant decides upon the property based on its desirability, not necessarily what the agent charges. The outright ban has come as a shock to the industry and there are calls for instead a nationwide cap, a consideration though difficult to implement due to regional differences.

Once the ban comes into effect agents will likely absorb some of the cost whilst passing genuine administrative running costs on to the landlord. We doubt whether some of the unscrupulous agents will be able to get away with charging their landlords the same amount they currently charge tenants.

Will rents increase? Rental value is down to basic economics of supply and demand, landlords do not set market rents. There will undoubtedly be an increased burden on the landlord, one that follows on the coattails of the recent tax changes, these changes combined may well force some landlords to sell which will reduce stock, the knock on effect an increase in rents.