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.”