On 23rd November the Chancellor announced ‘we will ban fees to tenants as soon as possible’.
We are unsure at this stage whether the ban will apply to ALL fees or just fees charged to a tenant prior to a tenancy being agreed. Some agents charge a non-refundable fee to tenants to register – we have never done this as we feel that it is unfair.
Our tenant fees (which we believe to be the lowest in the area) cover the cost of credit checks and references; right to rent checks; viewings; negotiation; and all paperwork required prior to a tenancy commencing.
If pre-tenancy costs are soon to be borne solely by landlords, the blanket ban on tenant fees is likely to backfire on tenants as rents will rise to cover the landlord’s increased costs (rents rose by some 8% in Scotland when tenant fees were banned).
This announcement is yet another way in which the government is putting financial pressure on the small landlord – after the recent changes in mortgage interest tax relief and the increase in stamp duty for buy-to-lets, this seems unsustainable if government wants to retain a well-run private housing sector.
Our professional body, ARLA, has advised that consultation will be required and any changes may take 12-18 months to come into effect. We will keep our clients updated as more information becomes available.