Tomorrow (1st June) the Tenant Fees Act 2019 will come into force, bringing big changes for the private rental sector (PRS). There has been speculation that many landlords will combat the ban on fees by increasing rents, or simply leaving the market entirely.
In response, it has been suggested that the Government should also introduce rent controls.
Rose Jinks, spokesperson for our sister company Just Landlords, was a guest on various radio stations across the country yesterday, discussing the ban and the changes that it will bring about. Together with Just Landlords, we have been keeping our readers up-to-date on the Act’s progress.
With changes imminent, Neil Cobbold, Chief Operating Officer of PayProp, has shared his expectations for the PRS: “After a long period of waiting, the Tenant Fees Act is finally being introduced. This should help to provide greater certainty in the lettings market, alongside a sense of finality for letting agents, landlords and tenants.”
“The fees ban will affect the majority of professional letting agents, who up until now were able to charge tenants with honest and affordable fees for the services they provide.”
“While the legislation will undoubtedly help protect renters from a minority of agents that charge exorbitant fees, it will take some time to determine the true consequences of the tenant fees ban and whether it leads to rent rises across the board.”
“In order to replace lost revenue from tenant fees, agents will need to generate new income streams, make their processes more efficient and potentially increase landlord management costs where necessary.”
“Research by Kent Reliance shows that over a third of landlords are looking to cut their annual costs, with 30% saying they want to reduce their spend on letting agent fees. There is no doubt that the introduction of the Tenant Fees Act will require agents to work harder to retain existing business and secure new clients.”
“With all agents in the same position, one could argue there is now a level playing field. That said, market conditions for all agents across England will be challenging.”
“The best letting agencies will already have prepared and implemented various strategies to help combat the revenue lost because of the Tenant Fees Act.
“These will include adopting the best PropTech services and products and streamlining their businesses. This will allow agents to dedicate more time to their clients and provide outstanding customer service – a cornerstone of the lettings industry which could help an agency to differentiate from their competitors.”
“The future for letting agencies remains bright as the private rental sector continues to grow and the need for professional experts rises in an increasingly complex and regulated lettings market.”
“From here on in it will be the letting agencies with a clear business strategy in place, which invest in technology and take a customer service-led approach, that can reduce the impact of the tenant fees ban.”
David Cox, Chief Executive, ARLA Propertymark has also commented on the upcoming Tenant Fees Act: “The Tenant Fees Act comes into force tomorrow, and agents should already have implemented the correct changes within their business in order to be compliant with the law.
“Members should refer to our Tenant Fees Toolkit for relevant advice, information, and legal documents that have been produced with the ban in mind. Although the Tenant Fees Act has been front of mind for a while, it’s important members stay up to date with other laws and local licences that are being introduced, as a breach of the ban can result in a large fine, so it’s vital agents get this right.”