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Tenant fee ban ‘clearly designed to shift the costs to landlords’

The government’s decision to ban tenant fees is clearly designed to shift the costs to landlords, according to Property Personnel.

The estate agency recruitment consultancy believes that the tenant fee ban, which which prevents agents or landlords charging a tenant any kind of fee in addition to their rent, will send “seismic shockwaves” through private rented sector and that will have a major impact on letting agents and landlords.

Property Personnel’s managing director Anthony Hesse said: “This new Act will send seismic shockwaves through the lettings sector - and there’s no doubt that staffing levels will be hit.


“Lettings agents are having part of their bottom line swiped away, despite the fact there is still administration that they will have to do. So they are going to have to do more work for less income.

“Furthermore, this is a move which is clearly designed to shift the costs to landlords. But landlords will do everything they can to avoid any extra charges. And for some, this will include deciding not to instruct a letting agent at all in the future.

“All of this will reduce the amount of money in the pot for letting agents’ salaries. We are already struggling to fill these positions as it is – but this move is likely to drive even more lettings personnel from the industry, who will be hard to replace.”

Hesse believes that the introduction of the Act comes at a turbulent time for the sector.

Last month, a survey of almost 6,500 landlords by the Residential Landlords Association found that almost half - 46% - of landlords and letting agents are more likely to remove their investment in the private rented sector as a result of the government’s plans to end so-called ‘no fault’ evictions by the abolition of Section 21.

Hesse added: “The overall picture is that estate agency feels it’s getting battered from all sides. It’s such a marginal industry, if companies are not earning enough money to pay their staff properly, employees are going to vote with their feet.

“This will be particularly acute in firms where fees provide a proportion of an individual agent’s income. In bigger chains, those carrying out tenancy progression will be on a flat salary. But in a small independent firm, that’s often not the case and a level of commission will be involved – which will now disappear altogether.

“Ultimately, for many lettings agents, these fees are a crucial revenue stream and profit margins have to be protected. From a recruitment perspective, it’s hard enough to find people and get them to stay in the business as it is. I suspect that job has just become even more difficult.”

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    '' Clearly designed to shift the cost to landlords '' ? then who ever designed it didn't design it very well did they ? as always it will be the end user that pays .

     G romit

    This is all designed by the Government to make their BTR buddies aka big Tory donors look more competitive, and to drive out more Private Landlords out of the market.

    Also, in a few years time, look & see how many Tory Ministers are on the Boards of BTR companies (or their holding companies).

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    Tenant fee ban ‘clearly designed to shift the costs to landlords’. Unless I'm mistaken I thought that was entirely the point.
    I think the problem stemmed from a greedy minority of lettings agents who tried to make as much from tenant fees as they could, had they kept it things reasonable the fees ban probably wouldn't have been deemed necessary.
    The thing a lot of people seem to ignore is that lettings agents primarily work for landlords not tenants, on that basis it's understandable that they're fees should come out of the rent rather than the tenant in the form of fees.

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    • 06 June 2019 11:33 AM

    What about Corbyn!?
    Rent control would severely compromise the BTR business model Wonder if these BTR investors are aware of the very real threat of Labour rent controls.
    Could put a severe dent in shareholder dividends!!!
    Which was the very reason BTR disappeared in the 70's


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