Almost a third of buy-to-let landlords are unaware of the proposals for a draft bill banning letting agent fees, according to a new survey.
The research from property management platform No Agent, which coincides with yesterday’s Westminster discussion on the letting agent fee ban, found that 31% of landlords across the UK are oblivious to the planned letting fee ban which could have a knock-on effect.
The announcement during the chancellor’s Autumn Statement last year of an outright ban on letting agents’ fees to tenants in England was clearly designed to shift the costs to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents.
Some experts believe that the banning of fees will end up hurting tenants, which is the very people the government intends on helping the most. But landlords are unlikely to escape unscathed, especially as the planned ban will mean tenants in England will no longer have to pay anything other than rent and a refundable deposit. Other charges will need to be picked up by landlords.
Separate findings from the survey revealed that more than a third - 35% - of landlords agree with the government’s argument that the ban will force agents to become more competitive and provide better service for landlords.
Some 46% felt that the deposit cap of one month’s rent, which was included in the initial consultation but yesterday was agreed would be exempt from the ban, would make them less likely to rent properties to tenants with a poor credit history - as they wouldn’t have been able to ask for a higher deposit to mitigate the risk of financial loss.
What’s more, 37.7% of landlords agreed that if the deposit was capped at one month’s rent they would be less likely rent to tenants with pets or with children, while the majority of landlords - 57.38% - think that a cap on letting fees for tenants will work better than an outright ban.
Calum Brannan, CEO of No Agent said: “It is time to bring the rental sector into the current day and remove the inefficiencies it has been plagued with for so many years, and this bill marks the beginning of this change.
“It’s worrying to see the awareness of the proposed tenant fee ban amongst landlords is so low, particularly given how much of an impact this will have on their current business models. More needs to be done by the Government to ensure this vital group know what is to come into effect in 2018.
“We do believe the ban will force further transparency in the lettings market, which is ripe for disruption and requires a complete overhaul. We very much hope, along with the 37% of landlords of this country, that this ban will force letting agents to become more efficient, and adopt technologies and new processes that will save money for all parties involved, including tenants.”