Ban on letting agents fees
I read some research today claiming that almost a third of landlords in England would be discouraged from continuing with a letting agent should the agent increase their landlord fees should a ban on tenant fees become a fact.
I know from our own client list that over three quarters of landlords use some form of third party to let and in some cases, manage their properties. However, we have quite a few clients that have several buy to let properties in their portfolio so unsure if that is altering the figures.
Although I read a report from Paragon that they came to the same findings, when they surveyed over 200 landlords.
When you read further into the findings of the report it interesting that 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.
An interesting finding was of the 27% who let and manage their own properties 84% do not charge tenant fees. Would this suggest that eventually market pressures would have removed tenant fees without the government getting involved and banning them?
It seems the most common fees charged by landlords are for credit check, inventory listing, referencing and for tenancy agreements. If these were not charged up front would they just be added to the rent? They are a legitimate business expense and any other business would look to recoup the cost via the income of the business.
Of course, whilst we are looking at the current hot issues we should consider caps on rental deposits. Should they be capped and if so at what? It seems when I attend property meetings the general opinion is for a two month cap. I know from looking at other countries that have caps of less than one month it results in an increase in rent as the landlord has to factor in that the deposit will not cover damages and cleaning costs once the tenant leaves. Why should future tenants pay for the behaviour of previous tenants?
What are your thoughts on the proposed letting agent fees ban?