David Cox, Chief Executive, ARLA Propertymark comments on the draft Tenants’ Fees Bill to ban charging tenants ‘lettings fees’ announced in the Queen’s Speech:
“The announcement of the draft Tenants’ Fees Bill today was disappointing. 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 2ndJune. 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 £200 million in turnover, costing the sector 4,000 jobs. Landlords themselves would lose £300 million, meaning they may seek to cover their losses by increasing rents to tenants.
“On average, rent costs will go up by £103 per tenant, per year, ultimately meaning tenants who move more frequently will reap savings on their overall costs but longer term tenants, who are usually lower income families, will see a loss as their rents rise year-on-year. The ban contradicts the Government’s stated aim to encourage longer term tenancies, as tenants who stay in their homes for the long-term will end up shouldering the costs of those who move more frequently.”