21^st Jan 2018

Despite it being very unlikely that the lettings agents' fees bans will not come into force until 2019, England's landlords are being urged to start getting prepared for the eventuality.

The MCHG (Ministry of Housing, Communities and Local Government) has issued a statement to the Communities and Local Government Select Committee in Parliament that it is very likely it will not be passed until spring next year.

It has said that the period before the implementation of the ban will take at least fifteen months as the current draft Tenant Fees Bill has to undergo a 'pre-legislative' scrutiny before it can be passed.

The Committee was told by representatives from the University of York’s Centre for Housing Policy and Shelter, that the banning of tenant letting fees will almost certainly cause rents to rise as agents will have to recover their 'losses' from their landlord clients.

The experts also said that the ban could lead to reduced standards of accommodation as landlords themselves may be forced to cut corners. However since the letting fees ban came into force in Scotland in 2012, the predicted high increases in rents did not materialise.

Shelter Scotland said that although there has been a small increase in rents this was not due to the ban but because of the tax changes. The charity carried out research in 2013 and found that just 2% of landlords had increased their rents.

In November 2016 the Scottish Government published a report that showed overall the banning of the fees had helped tenants, and its figures showed that rents had risen by only 1% in the 12 months to the end of September 2016 - the lowest rise since 2010.

James Davis, founder of an online letting agent, is encouraging landlords to be properly prepared for the incoming ban as there is now a date to work to. Davis is portfolio landlord himself and said that many people in the industry believe that the ban could be introduced by the end of this December.

Davis said: "Landlords simply can’t afford to not be prepared for what lies ahead. In my experience, there’s a certain amount of head in the sand mentality around the impact that this ban could have, both amongst letting agents and landlords.

"Unfortunately, many headlines focus on how rents will increase once this legislation is implemented but the reality for landlords is that this needn’t be the case. Most private landlords don’t, in fact, charge excessive upfront costs and by simply taking the time now to consider how else they can manage their costs, they’ll be assured of being prepared for the fees ban, whether that happens, this year, next year or indeed at all."

A National Letting Scheme is relieved that there is now some clarity on the ban with a proposed timescale, CEO Isobel Thomson said: ‘It is much needed for our industry.

"The Government is currently carrying out pre-legislative scrutiny of the proposed bill ahead of presenting the bill to parliament."

She does realise that the bill's intention is aimed at making renting fairer for tenants; however she is concerned that it could damage the sector if not properly thought through.

She finishes by urging the government:"........ to use this time to fully assess the impact of the bill. It is crucial that Government looks again at the proposals and consider tenant fees in a broader, coherent framework of regulation for the PRS."

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