In this year’s Autumn Statement, Chancellor Philip Hammond announced that the government would be introducing a ban on lettings agents charging upfront fees to tenants.
The thinking behind this is the fact that prospective tenants cannot ‘shop around’ for lettings agents. Tenants have to go through whichever agent the landlord has chosen to advertise the property with in order to rent the home they want. Whilst the average fees in the UK are around currently £300, some are as high as £700, particularly in London. This has led to concerns that these fees put an undue burden on renters.
Whilst this move has been generally welcomed by housing organisations, some landlords may understandably be apprehensive. By banning lettings agents from charging tenants, it is presumed these fees will be pushed across to landlords. This could add yet more to their costs in a year that has already seen changes to taxes and mortgages impacting rental income. Some have suggested this may lead landlords to increase rents to mitigate the affect, thereby removing any potential benefit to renters.