Proposed ban on letting agent fees will drive up rents

Letting agents will compensate for potential losses resulting from a future ban on letting agent fees paid by tenants by increasing rents, it has been claimed.

Letting agents generally view the proposed ban on tenant fees as a draconian measure that will have an adverse impact on the rental market.

If fees are banned, many agents will seek to pass these costs on to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents, according to the Association of Letting agents (ARLA Propertymark).

The government initially announced plans to ban fees to lettings agents in England late last year, with a Tenants’ Fees Bill announced in the Queen’s Speech in June, which will stop tenants having to pay money to agents, while the Welsh government has now launched a consultation on proposals to ban letting agents from charging fees to tenants.

Ultimately, it looks likely that tenant fees will soon be banned throughout the UK, but any move to do so, including abolishing fees in Wales, will cause “unprecedented damage to the rental sector” across the country, according to David Cox, chief executive, ARLA Propertymark.

He commented: “Independent analysis commissioned by ARLA Propertymark, following the UK government’s announcement of its own ban, revealed that if a full ban was introduced, rents will increase by £103 per year which will only serve to financially punish long term tenants.

“In our submission, ARLA is calling for fees associated with referencing to be left out of any ban. Right to Rent checks will soon be a service that agents in Wales will be required to undertake by law so it is only right that agents should be able to recover the associated costs, given the time and resources needed to carry out such checks.”

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Written by: Houseladder