More than 4,700 respond to Letting Agent Fee consultation

More than 4,700 people responded to the governments consultation on banning fees paid by tenants to landlords and letting agents.

The consultation, which closed on June 2 argued for a ban “clear and simple for all involved” and said the proposed measures will “stop hidden charges and end tenants being hit by costly upfront payments that can be difficult to afford”.

It also says that the move will bring an end to the small minority of agents exploiting their role between renters and landlords, banish unfair charges being imposed and stop those agents that double charge tenants and property owners for the same service.

In a written question Roger Godsiff MP (Labour, Birmingham, Hall Green) asked for assurances that legislation would be put in place preventing landlords from passing any increases in their costs onto tenants through higher rents.

In response the Minister, Alok Sharma MP, said: “The government recently announced in the Queen’s Speech its intention to publish a draft bill to ban letting fees paid by tenants in England.

“A ban will mean that tenants are better able to search around for properties that suit their budget with no hidden costs.

“This is preferable to tenants being hit with upfront charges that can be difficult for them to afford.

“The approach taken in the draft bill will be informed by the recent public consultation, which closed on 2 June and received over 4,700 responses.

“These responses are being analysed. The Government will publish its response to the consultation in due course and further information on the draft bill will follow.”

In implementing a ban, the Government proposes:

• To introduce legislation which will mean that no agent will be able to charge tenants any fees, premiums or charges that meet the general definition of facilitating the granting, renewal or continuance of a tenancy.
• To ban any letting fees charged to tenants by landlords and any other third parties to ensure that letting agent fees are not paid by tenants through other routes. Tenants should only be required to pay their rent and a refundable deposit.
• It also says that it wants to look at how the scale of the deposit needed can be reduced.

It has been said that landlords will be left to pick up the bill if the government presses ahead with plans for a blanket ban, saying that with some agents picking up as much as 30% of their income through these fees they will have no choice but to pass them on to landlords.

Landlords, already feeling the pinch as a result of tax changes and cautious about who they will let to, due to right to rent – will be even more reluctant to take a chance on tenants who not obviously financially secure.

It has also criticised plans to limit the amount landlords can charge as deposits and holding deposits – proposals which had not been made public until the consultation documents were sent out.

Bowson Estates will keep clients fully updated on this.