Tenant Fee Ban - How will it affect you as a Landlord?
Landlords do you know how the tenant fee ban will affect you?
As a landlord are you confused by the proposed tenant fee ban, due to come into force on the 1st of June 2019?
It all started with the Autumn 2016 statement where a ban on letting fees was announced. This was aimed at stopping some agents and landlords from charging prospective tenants whatever fees they could think of. Fuelled by a Shelter report that 1 in 7 tenants pays more than £500 in non-returnable tenancy fees the government proposed a fee ban.
The ban is set to come into force in June 2019. The maximum a tenant can expect to pay for a new tenancy is:
One month's rent
Security deposit (capped at no more than 5 weeks' rent)
A holding fee (capped at 1 week's rent).
Agents or landlords will no longer be able to charge tenants fees that cover a proportion of the costs of credit checks and referencing, check in/out, preparation of the inventory, tenancy agreement, deposit protection, contacting the utility companies or for any other service provided. This is work that still has to be done to protect both tenants and landlords and make sure landlords are legally compliant. So, who pays for it? Agents can’t just absorb the cost, as like any business additional costs have to be passed on to the customers be that the tenants through increased rent or the landlords through increased fees.
Landlords, should be asking their current lettings agent how they plan to counter-act the tenant fee ban. The cost of tenant credit checks from June 2019 may well fall on the landlord and with a smaller holding deposit tenants may apply for multiple properties as they have less to lose. How much does your current agent charge? Can you afford to or do you want to carry on paying more?
Time to consider switching to Orchard K Lettings? Established in 2015 we let and manage property in Norfolk. Our fees are already very competitive and we provide a real personal service. Landlords, it’s time to review what you're paying your current agent, find out if it will increase next year and shop around for the fees you are willing to pay for the service that you need and expect from a good lettings’ agent.
Did you know that you don't always need to wait until the end of a tenancy to switch letting agents? Check your agency terms and conditions e.g. some ask for 3 months' notice to terminate the agency agreement. Be prepared for June 2019 rather than surprised.