Yesterday, MPs debated the proposed letting agent fee ban in Westminster Hall, Parliament.
MPs Debate Letting Agent Fee Ban in Parliament
The plan was originally confirmed in June’s Queen’s Speech, following an outlined proposal by former chancellor Phillip Hammond in November 2016.
Kevin Hollinrake, the Co-Founder of Hunters Estate Agency and MP for Thirsk and Malton, called the debate amongst MPs.
It is believed that an outright ban on letting agents charging fees to tenants will be implemented at some point over the next year.
The draft Tenants’ Fees Bill – outlined in the Queen’s Speech – also revealed plans to cap security deposits to one month’s rent.
The official consultation to the letting agent fee ban closed on 2nd June 2017.
Many members of the lettings industry believe that letting agents will pass on higher costs to landlords in order to recoup the fees that they can no longer charge tenants.
Therefore, landlords may either put rents up for tenants – which would only damage tenants’ finances further – or self-manage their properties – which could lead to some landlords failing to carry out all of their legal obligations.
David Cox, the Chief Executive of ARLA Propertymark (the Association of Residential Letting Agents), responds to the debate: “We welcome [yesterday’s] comments from Kevin Hollinrake MP around the unintended consequences of a total ban on letting agent fees, including higher rents for tenants as landlords seek to recoup their costs. This is something ARLA Propertymark has warned against for some time. We commissioned independent economic analysis earlier this year, which showed the average tenant will see their rents increase by £103 on average per year as a consequence of a full ban.
“It’s important that the Government understands the value of the services agents carry out for both landlords and tenants when shaping its final legislation. We are therefore disappointed in the Housing Minister Alok Sharma’s comments [yesterday], declaring that the Government’s position remains that all fees will form part of the ban. As Kevin acknowledges, the ban on fees for referencing checks will cause problems. Agents are required to carry out these checks by law, and they invest both time and resources to ensure this work is carried out properly. The Government must now consider exempting referencing checks from the ban as well.”
What are your thoughts on an outright letting agent fee ban for tenants?