21st
Aug 2016
It is common knowledge that lettings agents charge tenants fees (except in Scotland) when they first sign up to a rental contract. The fees vary widely as tenants can be charged anything from £50 to £500 when moving in.
However very few landlords may be aware that the government has plans to abolish many of the fees, perhaps even scrapping all of the letting agents’ fees charged to tenants throughout the UK.
A major UK online letting agent has just released their research that claims more than half of landlords (54%) are unaware of the government’s plans. Baroness Grenader has proposed changes to the Renters’ Rights Bills that will abolish letting agents’ fees and in some cases landlords.
The research surprisingly states that the majority of landlords who are aware of the proposed changes do not seem perplexed at all; of course tenants are extremely happy if the government goes ahead.
The online lettings agent feels that perhaps the government is making a mistake by abolishing the fees as far more tenants (60%) would opt for a cap on rents instead of capping agents’ fees.
In a statement the firm proposes that “maybe the government should focus more of its efforts on increasing supply rather than the removal of tenant’s fees, as this would reduce the rent prices nationally and save tenants more money in the long run.”
Richard Merrick of PIMS says: “It is understandable from a letting agent’s viewpoint to suggest that government caps rents rather than their fees. However in the long run a rent cap could have a decided effect on PRS, it hasn’t worked for previous governments and lower yields will determine whether new landlords expand the market, or existing ones increase their portfolios...which of course will mean fewer rented properties to manage.”
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