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The Ban on Letting Fees

Posted by Jennifer Jameson on October 24, 2017
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Since November 2016 tenants have been eagerly awaiting news on the ban on letting fees to tenants. This plan was announced in the Autumn statement of 2016, but we still see no changes. There was a consultation which took place from April to June 2017, the most recent announcement from a spokesman for DCLG said: ““Our tenants fee bill will be first published in draft to ensure full scrutiny of our proposals by parliament and stakeholders before introducing the legislation formally. We shall publish the outcome of the public consultation on our proposals shortly.”

There are currently no limits to what a tenant should pay the agents in admin fees, these fees are payable to referencing, credit checks and immigration status checks. Government figures suggest the average fee is £223, while shelter have suggested one in seven pay more than £500; the fees range from £40 to £813. These fees are said to be paid by more than 4.3 million households per year.

The concerns is that if these fees are banned, the agency will have to charge more to the landlord and in turn the landlords will just put up rent. ARLA Property mark confirmed this point, stating that as a result landlord would lose £300m. The CEO, David Cox stated: “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.”

These fees have been banned in Scotland. In the UK we need to make the process of renting a property more transparent and consistent. If the fees were simply capped at a certain level, this would give tenants more certainty on what they will be paying. It is already law in England and Wales for the rates to be published and we now expect the ban or cap to come into place later this year.

The law has not yet been introduced, but a government spokesman told the BBC a draft bill will be published later this year. It will then have to be passed in Parliament, before it is enforced.

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