Tenant fees will be banned from June 2019 says David Lawrenson of www.LettingFocus.com.
Tenant Fees to be Banned
The government has placed a ban on letting agents and landlords charging fees to tenants. This will start from 1st June 2019.
The lettings industry cannot be surprised about this. Too many of them charged tenants fees, when they were also charging landlords for the same services.
In many cases the level of fees charged were out of all proportion to the “services” provided.
Too often, fees were hidden and not made clear to tenants until the last minute, when they had already invested a lot of time securing the property.
We always thought it was madness that the past law on this did not mandate that the likes of the portals, (Rightmove, Zoopla and others), should have to display tenant fees on their advertising listings. All they did, for most ads, (If they did anything at all) was just place a tiny notice saying “fees apply” on the listing.
This was a huge omission in the law because many of the actual letting agents who advertise on the portals, (which is just about all of them), were not exactly busying themselves telling applicant tenants what the fees were. (They were supposed to show tenant fees via one mouse click to a page at their own sites. Many did not and the authorities seemed unwilling to take any action against these omissions).
Tenant Fees Ban – Higher Rents Could Follow
What will happen now?
Well, letting agents will just have to make up the lost income by increasing the fees they charge landlords. Most landlords will have to accept it, but many will try to pass on the cost (or at least some of it) straight on to the tenant in higher rents.
How much they will be able to do this depends on the level of competition for private rented accommodation in the local market.
At the same time, tenants’ deposits for new tenancies will be limited to 5 weeks’ rent (or 6 weeks’ if the annual rent is over £50,000).
The only fee that letting agents and landlords can now charge will be a “Reservation Fee” of one weeks’ rent, once referencing has been completed and an offer made to let a property.
This was allowed in order to stop tenants putting offers to rent in on multiple properties – and then pulling out of deals at the last minute, leaving landlords high and dry, with no tenant.
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In the Media (Link opens at LettingFocus.com)
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