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Landlords face losing millions as government cracks down on letting fees

Landlords are set to lose out on millions of pounds through a clampdown on rental fees after the government yesterday announced further protections for tenants against letting fees, as part of the Tenant Fees Bill.

Under the new default fee provision, a landlord or agent will only be able to recover reasonable incurred costs, and must provide evidence of these costs to the tenant before they can impose any charges.

The move is designed to ensure that tenants in the private rented sector are not made to pay excessive fees for what is perceived to be ‘minor’ damages.


Other amendments to the Bill brought forward by the government include taking steps to ensure tenants get their money back quickly by reducing the timeframe that landlords and agents must pay back any fees that they have unlawfully charged.

The Bill, which will cap tenant deposits at a maximum of six weeks, is expected to save tenants around £240m a year.

Minister Rishi Sunak MP commented: “Tenants across the country, whatever their income, should not be hit with unfair costs by agents or landlords.

“This government is determined to make sure our housing market works and this new provision in the Tenant Fees Bill will make renting fairer and more transparent for all.”

But figures produced by the Department for Communities and Local Government earlier this year suggested that the proposed changes could result in landlords losing a collective £166m per year and letting agents up to £184m.

David Cox, chief executive, ARLA Propertymark, said: “We’re disappointed but unsurprised the Tenant Fees Bill has passed the House of Commons. 

“Over the summer, we worked with Daniel Kawczynski MP on his amendment to allow agents to charge up to £300. Although the amendment was unsuccessful, this shows that members involved in ARLA Propertymark’s campaign have helped MPs understand the unintended consequences of the tenant fee ban; with some MPs listening to the legitimate concerns of the industry.

“As the Bill moves into the House of Lords we will continue working to ensure parliamentarians understand the impact the ban will have on the whole private rented sector.”

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    laughable ! they really think these fees and costs will disappear? get real, they will be passed onto the landlord, then the landlord will increase rents to cover his / her increase in overheads, happens in all businesses, overheads increase the end user pays.

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    • 06 September 2018 09:22 AM

    We almost always lose money on damages to our properties. And very often tenants fail to pay the last months rent saying "take it from the deposit". Because of that any outstanding repairs or renovations, gardening et cetera which the tenant has agreed to maintain, now becomes something that we have to pay for. The current government seems to favour tenants in every which way and the only natural corresponding outcome to all of this is we landlords have to increase rents continually, to remain solvent. The general comment I would make is that the high degree of interference and micromanagement of the PRS sector by government, no matter how well intentioned, is driving rent increases. In trying to protect perceived infractions against tenants, government policy is hurting tenants.


    I am in the unenviable position of being unable to raise rents to cover these costs.
    I alone will have to 'take the hit'.
    Also with Rent Smart Wales intending to bring in a raft of new onerous conditions, I will struggle to make any sort of living out of it.
    If this happens, I may have to consider going down the Air B&B route.
    It really is 'open season' on landlords at the moment, as the government become increasingly liberal in their attitudes towards us.

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    There are plenty of areas where too many tenants are chasing too few properties and this rents can go up to accommodate increased landlord costs. Why stick with areas where you have to subsidise tenants?


    Because if your properties are in those areas and you are resident in the locality you haven't really got a choice?

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    Couple of simple answers to the Council and government " dont know anything about renting properties" departments.
    Is to sell up and leave these fools to provide homes and let them work to their stupid rules.
    Or when you present TA put in provisions to cover Cleaning, Repairs, None payment of rent, and place the "deposit, extra months rent (say 3 months) into a separate bank account called future provision funds, which will be used for the tenant who does not leave the property clean and tidy and like it was when they moved in and as shown by the Inventory, or damage, or none payment of rent. The tenant has to sign this is the dont move in. Forget deposit schemes which most of the time ate in favour of the tenant I when LL presents proven dated witnessed evidence.

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    I like it but not sure it's legal to avoid the statutory deposit schemes?


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