The Government has announced its intention to ban letting agent fees

Wednesday 23rd November 2016

In today’s Autumn Statement the Chancellor has announced the government’s intention to remove the ability of agents (who are instructed by landlords) to charge prospective tenants fees for their work. Currently, agents can charge for a range of administrative tasks such as credit checks, referencing and inventories.

The charges which sometimes amount to hundreds of pounds are deemed by the Government to be unfair to tenants.

Since last year agents in England & Wales have been legally obliged to ensure that their fees were publicised. The likely result of placing a ban on fees would be landlords increasing the rent.

The private sector has stepped up in recent years as demand for housing increases. Government has in turn introduced measures to protect tenants. These include:

  • Deposit protection
  • S21 eviction procedure
  • Retaliatory eviction and disrepair
  • Immigration checks

Danny Smith, property litigation solicitor said: “The plans announced in today’s Autumn Statement to put an end to letting fees could leave letting agents with little choice but to pass costs on to landlords, which may in turn lead to an increase in rent for tenants.

“From a financial perspective the larger portfolios will bear the most significant costs, as they may need to pay the fees in advance of their tenants moving into their properties. Smaller landlords will not escape the burden, as often these are individuals who rely on rental income.

“My advice for landlords would be to shop around and ensure a credible letting agency, capable of handling the recent increase of regulation in the private sector, is chosen and that the value of their service is maximised to reduce the burden of increased fees.”

Should something not go as planned, our expert property disputes team at Gordons will be happy to assist.