Comment: Ban on letting agents charging upfront fees
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Renting can be a miserable business. Speaking as someone who lined landlords’ pockets for the best part of a decade I know exactly how frustrating an experience it can be.
In last week’s Autumn Statement, Chancellor Philip Hammond promised to take away a layer of pain for renters with a ban on letting agents charging upfront fees.
At present, tenants are paying an average of £223 per tenancy – according to the Government’s own figures – for miscellaneous extras in addition to their rent and deposit. In this part of the country, as with most things property-related, the average seems far higher.
A quick scan of a dozen or so Herts-based letting agencies’ websites found their fees hard to fathom, and many didn’t explicitly mention exactly what their extras involved.
Those that did showed a mixed bag of charges, including admin fees of up to £285 for the first tenant (extra for the second), check in fees of about £90, a guarantor’s charge of £150 and a weekend move in surcharge of £48. They vary wildly, too - it was almost impossible to compare like with like as they were all so different.
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Not surprisingly, David Cox, managing director of the Association of Residential Letting Agents, isn’t impressed with what the Chancellor has planned. He described Hammond’s announcement as “a crowd-pleaser, which will not help renters in the long-term”.
He went on to echo the claim made by many letting agents since last Wednesday: the banning of fees will hurt tenants the most as “if fees are banned, these costs will be passed on to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents”.
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Alan Ward, chair of the Residential Landlords Association agreed, adding that the Government would have been better off taking steps “to improve the transparency of fees charged by agents by forcing them to publicise what the fees actually cover”.
There’s no denying that, were the latter point a reality, it would be a wondrous thing.
Nothing’s going to change overnight, of course – experts believe it could be another 18 months or so before the proposed ban on letting fees becomes law. For now, the varied charges are unlikely to deter many potential tenants from signing on the dotted line.
For someone who’s already committed to shelling out a load of cash in rent, a range of random admin fees are begrudgingly accepted as part of the process.
When simply getting to the point of finding a suitable property that hasn’t already been snapped up by another eager renter can be a challenge in itself, few want to fall at the final hurdle.
We’ll have to wait and see if landlords do eventually respond by ramping up rents… but from a tenant’s point of view, increased transparency and consistency among agencies would also be brilliant.