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Inclusion of letting agency fee ban in Queen’s Speech ‘reeks of desperation’

The Queen’s Speech was unsurprisingly dominated by Brexit, with a host of proposed new laws designed to prepare the UK for a smooth departure from the EU.

But there were a few main non-Brexit proposals in the Queen’s Speech outlining the government’s proposals for the next two years, including a Tenant’s Fees Bill, banning landlords and letting agents from charging letting fees.

The fees ban was initially announced last November during the chancellor’s Autumn Statement, and although the details are still very unclear, the move is clearly designed to shift the cost of all letting agent fees on to landlords.


Some experts now believe that this proposed change in the law will leave landlords with no choice but to further increase rents, as letting agents look to pass existing tenant fees onto landlords.

Danielle Cullen, managing director of StudentTenant.com, believes that the prime minister Theresa May is “clutching at straws” by including letting fee ban in Queen’s speech.

She said: “The inclusion of the letting agency fee ban in the Queen’s speech does nothing but reeks of desperation.

“Theresa May obviously failed to gain the public’s trust with her manifesto in the lead up to the election. Now she is desperately clutching at straws trying to please as many people as possible, on a matter very important to large numbers renting in the private-sector."

Cullen is annoyed that the consultation on the tenant fee ban was scrapped when the snap election was announced in April.

She added: “I would not be surprised if a bill is just pushed through without proper thought, in the hope of gaining more credibility for what currently seems to be a shambles of a government.

“This is deeply concerning for all of the small businesses who will not be able to maintain revenue without these fees, but also for tenants who will now have higher living costs as no rent cap has been mentioned as it was by Labour in their manifesto before the election.”

David Cox, chief executive at ARLA Propertymark, also expressed disappointment that the draft Tenants’ Fees Bill to ban charging tenants ‘lettings fees’ was announced in yesterday’s Queen’s Speech.

He commented: “It’s unlikely the Government had enough time to analyse all of the responses from the consultation, as it only closed 12 working days ago, on the 2nd June. It appears they had already made their decision and therefore the consultation was no more than a ‘tick box’ exercise and they haven’t appropriately taken the industry’s views into account.

“A ban on letting agent fees will cost the sector jobs, make buy-to-let investment even less attractive, and ultimately result in the costs being passed on to tenants. 

“Research conducted by Capital Economics for ARLA Propertymark earlier this year shows that referencing checks undertaken by agents take, on average, eight hours to complete. It is therefore right and proportionate that the industry is recompensed for this work, which benefits tenants. The research also showed that letting agents stand to lose around £200m in turnover, costing the sector 4,000 jobs.

“Landlords themselves would lose £300m, meaning they may seek to cover their losses by increasing rents to tenants.”

However, James Davis, CEO and founder of online lettings agency, Upad.co.uk, was not surprised that proposals were brought forward to ban “unfair tenant fees” in the Queen’s Speech.

He commented: “Ultimately, market forces haven’t prevailed in all of this. Foxtons put their tenant’s fees up by £50 every couple of years and it is purely to increase their profits, whilst other high street lettings agents ludicrously charge over £300 simply to press print on an identical tenancy agreement to renew for the following year.

“Long suffering tenants have no choice but to pay it as renting is a necessity; it is not like if a shop put up its prices and the amount it sold would go down.”

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  • icon

    News from us over here in TOWIE land.

    D & S Legal Ltd, the conveyancer started last year by Dean Alexander (previously of Alexander Lawyers LLP) has had the following condition imposed on his practicing licence by his regulator, the Council for Licenced Conveyancers (CLC).

    'The practice must not employ Mr Michael Alexander (former solicitor, SRA ID 098105) nor engage with, or receive work from any businesses that are owned, managed or employ the aforesaid Mr Michael Alexander'.

    Why have the CLC done that? Has the aforesaid Michael Alexander (Dean's father in law) done something bad??

  • G romit

    When is this Government (and any other Government) going to realise that if you increase a businesses' costs (inc. tax) s business has to increase its prices in order to maintain the same profit, and if the market will not bear such increases then the business will be unviable and will fold.

    Banning rather than capping letting agents fees will result in the costs being passed onto Landlords who in turn will increase rents. No doubt at some point either this or a Labour Govt. will "fix" this by capping rents and get a nice pat on the back from Shelter and Generation Rent. That is until the crisis in the number of rental properties available goes over a cliff edge, as Landlords exit the market en masse.

    When will we get a Chancellor that has been educated to at least Economics 101 and Business 101?

  • Bill Wood

    I wholeheartedly agree with James Davis of Upad. If a landlord employs an agent, the agent should seek to do it's best for the landlord in whatever area agreed between them, and the agent should get paid by the landlord for a job well done.
    Last year I placed an ad on uPad, and received 80 inquiries. If I had the gall to charge a fee of, say £100 per tenant, and if half of the tenents actually paid me out of desperation, I would have netted £4000. The following month I could have done the same, and got another £4000 (perhaps). I would get more money offering the house for rent than actually renting it!
    Things must be fair for the agent and fair for the landlord, but must be fair also for the tenant.


    Lettings agents do not charge every tenant a fee, only ones that are interested in taking the property. Once they do that, the property is usually taken off the market while references are taken. If references are acceptable, it is arranged for the tenant to move into the property, if they fail the references or withdraw from the property, then the property is re-marketed to find other tenants.

    If the landlord withdraws the property for any reason that isn't the tenants fault, we refund the fee paid or transfer them to another property if we have one available that matches their requirements.


    You have obviously never employed a managing agent. If you had you would know that landlords are already charged contract & contract renewal fees by their agents. The tenant's fee's cover references, viewings etc. Why should I, as a landlord get charged for those? If a tenant does not pass the reference check or decides to view several properties then he should pay for the time he/she has wasted.

    What part of that is unfair?


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