Autum Statement: Letting agent's fee ban

Posted: 23/11/2016

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The chancellor has announced a ban on "up front" letting fees for tenants but what does this mean and how will it affect landlords? Well firstly it applies to England only so if you are an NI landlord, at this stage, it means nothing - but read on as it may be coming. If you are one of our clients with a property in County Durham then it will probably affect you. So what are these fees? Well when a tenant wants to rent a property, agents ask them to fill in an application form so that they can conduct vetting. This usually includes I.D., credit checks, employer and landlord references, affordability, right to rent etc. Most agents use a specialist company to do some or all of that work. It is time intensive and obviously the specialist companies charge the agents. Applicants are charged a fee for this, otherwise they could make multiple applications with many agents on different properties, leaving agents to foot the bill. In Northern Ireland, fees are typically from £25 to £45. Unfortunately, many English agents have really stuck the arm in and charge tenants hundreds. In London we are aware that you could pay as much as £1000! This has made fees very unpopular with tenants who have been putting pressure on the government to ban them for some time now. We will have to wait to see the wording of the legislation, but in Scotland, where fees were banned a couple of years ago, agents simply passed the cost on to landlords who increased rents. So the tenants ended up paying for the fees but in a different way. We are hoping that as NI agents have not jumped on the sky high fee band wagon, that it will not become an issue for Stormont. In fact there is no real pressure on Stormont because local agents have acted much more fairly to tenants. Of course if it was to be introduced here then tenants would simply end up paying some way......

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