Almost a third of landlords would reconsider using an agent if fees increase

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Some 30% of landlords in England may be discouraged from letting property using an agent or third party if landlord fees were to increase as a result of a ban on tenant fees, a survey suggests.

The majority of landlords, some 73%, currently use an agent or third party to let some or all of their properties, according to the latest private rented sector trends report from Paragon which is based on interviews with a panel of over 200 experienced landlords.

Of those, 12% said they would ‘definitely’ be discouraged from doing so if landlord fees were to increase as a result of the upcoming ban on tenant fees in England, with 18% answering ‘probably’.

Some 16% of those who use an agent or third party said they would definitely not be discouraged and 30% said they would probably not be discouraged from doing so.

The report also revealed 27% of landlords do not use an agent or third party to let any of their properties. Of those 84% do not charge any tenant fees, whilst just 16% do.

The research reveals the most common fees charged by landlords when letting a property without the involvement of an agent or third party. Some 60% charge for a credit check, 55% charge for an inventory, 54% for referencing, 42% for a tenancy agreement and 33% of landlords charge for other, unspecified fees.

Asked what they believe is a reasonable cap on rental deposits, 68% of landlords said up to two month’s rent was reasonable. Of those, 46% said two months, with 22% indicating one month. Some 14% of landlords said three months was reasonable, whilst just 7% of landlords believe rental deposits should not be capped at all.

‘In the midst of ongoing turbulence in the private rented sector, landlords have already had to navigate through challenging policy changes, and rethink their strategies accordingly,’ said John Heron, managing director for mortgages at Paragon.

‘An increase in landlord costs as a result of a ban on tenant fees would be the latest in a succession of challenges and it’s unsurprising to learn that a substantial number of landlords might consider altering their approach to letting out their properties in that circumstance,’ he added.

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Written by: Houseladder