The Queen Announces Draft Tenants’ Fees Bill
As a landlord or tenant, you would have been hard pushed not to hear of the latest announcement during The Queen’s speech regarding the banning of tenant fees. It seems landlords and tenants are divided on how they feel about this legislation becoming more and more likely.
The draft bill proposes the following:
Tackling unfair fees on tenants will make the private rental market more affordable and competitive. The draft Bill will bring forward proposals to:
- ban landlords and agents from requiring tenants to make any payments as a condition of their tenancy with the exception of the rent, a capped refundable security deposit, a capped refundable holding deposit and tenant default fees
- cap holding deposits at no more than one week’s rent and security deposits at no more than one month’s rent
On the one hand, of course tenants will see the immediate benefit to their pockets when looking to move in to a rented property. With tenant fees in Southbourne alone, ranging from £470 including VAT (Winkworths – Southbourne) to £662 including VAT (Slades – Southbourne), it’s no surprise that the government is trying to ease the financial burden for tenants. (For transparency, Mr Green Lettings charge £510 including VAT)
(Fees quoted direct from agents website and do not include the first months rent or deposit and are estimated for 2 people renting a 2 bedroom property without a guarantor)
How will this impact landlords moving forward? Undoubtedly, some agents are going to be forced to review their income streams and potentially increase monthly fee commissions to counter balance the loss of income from tenants. After all, it’s not free for agents to find you a perfect tenant and ensure the tenancy is fully compliant and legal. Surely this will mean landlord’s are either out of pocket or will be asking for a higher rent to balance this extra cost.
Furthermore, if deposits are capped and the worst happens at the end of a tenancy, landlords stand to lose even more by being unable to recoup rent arrears and dilapidations from the deposit. Whilst we, as agents, can do all of the right things and tick all of the boxes, sometimes tenants do leave properties in less than desirable condition and without paying the last months rent. Legislation ties our hands on how we tackle these cases and ultimately the landlord will be the one who will suffer if this aspect of the bill is brought into force.
ARLA Propertymark CEO, David Cox, comments:
Commenting on the announcement ARLA Propertymark CEO, David Cox said:
“A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market. It will be the fourth assault on the sector in just over a year, and do little to help cash poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account.”
So what happens next?
We’re on the edge of our seats to find out how this legislation will pan out but to be honest, we’re not overly worried as we are confident that we can continue to deliver exceptional service to our landlords and tenants without needing to change our approach when the legislation does come to pass.
Mr Green Estate Agents Ltd are a proud and honest business and our focus is, and always will be, on being the best at what we do.
We are the only agent in Southbourne to offer a flat rate landlord commission fee, regardless of how much rent you receive, we charge one fee, no extras ever. How does that sound?
If you are thinking of renting your property and would like a free, no obligation chat with our friendly team, please give Tiffany a call on 01202 835897 or email email@example.com