Honourable and personal residential letting experts

30May Banning letting fees to tenants

Banning letting fees to tenants

We have submitted our formal response to the Government’s consultation on banning any fees being charged to tenants.

It is clear that this Government, and all parties standing in the 2017 general election, have determined to ban letting fees being charged to tenants. We hope our response will help shape the ban so it is applied without being impractical.

The Government have made it clear that tenants should not be charged for “facilitating the granting, renewal or continuance of a tenancy”, other than Rent, holding deposits, security deposits or property management things they want which are not the landlords responsibility.

We have said that we think tenants should meet the costs of things over which they control and choice, e.g.

  • Meeting the cost of missed (agreed) appointments such as property visits, contractors attending to do works prevented by tenant action.
  • Cost of payment by credit card or cash rather than debit card or direct transfer
  • Costs of chasing unpaid rent/bills, including interest on late rent
  • Changes to tenancies requested by tenants mid tenancy, e.g. change of people on shared tenancy
  • Costs of leaving a tenancy early, where requested by a tenant
  • Costs of having and managing pets in a property
  • Costs of managing works caused by tenants, e.g. end of tenancy repairs, swapping pay as you go electricity meters
  • Extra work associated with applicants with adverse credit histories e.g. extra referencing, guarantor referencing (otherwise landlords will avoid letting to these people placing a bigger burden on public sector)

These are items which we already make clear to people, along with a detailed explanation in the information we provide all tenants.

We have also expressed concern that the ban, particularly on the back of stamp duty changes and the change to mortgage interest no longer being a taxable expense, will have a polarising effect, with some marginal and less professional landlords deciding to operate outside the law. We think this will place risks on tenants as safety obligations are less likely to be followed, and further burdens on stretched local authority enforcement teams.

Our response makes it clear that any ban in fees being charged to tenants will result in those costs being met by landlords, who will aim to recover the cost through increased rent. In essence we think tenants will be no better off.

The one factor worth mentioning is the difference in fees being charged in different parts of the country. There are some genuine horror stories of tenants being charged exploitative fees in some big cities, particularly at a time when property is in high demand. Our research suggests this is not the case for the majority of the country, however it is these more extreme cases which have inevitably hit the headlines and captured the politicians attention.

A full copy of our submission is below.

 

Our submission was informed by the responses to the survey we conducted of people on our database. We have attached a summary of the survey below.

We will keep you posted on any further developments in this area, in the meantime if you have any comments on this subject then please get in touch.