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TODAY'S OTHER NEWS

Ban on letting fees moves a step closer

The next stage of the Tenants’ Fees Bill through Parliament will be a Second Reading in the House of Lords this week.

The reading, which will take place on Wednesday 10th October, will pave the way for a ban on letting fees and the majority of other upfront fees payable by tenants to rent a property in England.

It would also cap the amount of refundable security deposit a tenant would be required to pay to the value of six weeks’ rent and cap the amount of holding deposit a tenant could be required to put down to secure a property to the value of one week’s rent.

The government contends that the Bill, having completed its passage through the House of Commons in September, will make renting properties in England fairer and more affordable for tenants by reducing the costs at the outset of a tenancy, at the same time as improving transparency and competition in the private rental market.

The Bill would place a duty on trading standards authorities and district councils to impose new penalties on any landlord or letting agent found to be in contravention of them. These include a fine of £5,000 for a first breach, which would typically be viewed as a civil offence.

A further breach within five years, however, would be viewed as a criminal offence, and subject to an unlimited fine and a banning order offence under the Housing and Planning Act 2016.

Several organisations representing landlords and letting agencies have raised concerns that the abolition of fees will result in rising rent levels.

“With warnings that the policy could lead to rent rises, there is a very real danger that whilst the cutting the upfront cost of renting, tenants will find themselves paying them through higher rents on a permanent basis,” said the Residential Landlords Association’s (RLA) policy director, David Smith.

Instead of banning letting agent fees paid to tenants, the RLA is calling for immediate action to better enforce the law as it currently stands. This includes the government using powers it has so far failed to use to force agents to display the fees they charge in more prominent positions and specify them in much greater detail.

“Laws without proper enforcement serve only to let tenants and good landlords down,” Smith added.

He continued: “Rather than pressing ahead with plans for more legislation in the sector that will take time to be considered by parliament and enacted, ministers could achieve a greater and earlier impact by using the powers they already have to improve the transparency of fees charged by agents.”

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    Would have made more sense to put a cap on fees, to ban them altogether will mean rent increases to cover the extra costs, in the long term tenants will be paying much more.

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    I agree. This has already happened in Scotland. In fact if the UK Government wants to see how loony ideas backfire on tenants they only need to look up here where rents are up 25 to 30% over last two years in high demand areas - so landlords shouldn't be too concerned but tenants should be very careful what they wish for!

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    If this happened where I am then we would just have to absorb the costs as we would be unable to pass them on to the tenant.

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    Rent will invariably increase monthly to cover the annual loss for the agency. Long term tenants will pay more over the duration of their tenancy than they would have paid in one fixed, administration, referencing, registration, start of tenancy charge.

     
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    Who actually makes these decisions against Landlords. Do they know what the consequences are going to be? Why don't they just stop and think things through before the baseball bat comes out?

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    I've written to my MP to ask just that Glenn. We need to let the government know this is ill-conceived. It won't win them any tenant votes. It will lose them approx. £15000pa of taxable income from our company accounts and we're only a small family business compared to many other letting agents. We will give-up a part-time member of staff. I will do more unpaid hours to compensate. A cap on fees or a fixed maximum % of a month's rent would have been far more sensible if we need any further regulation.

     
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