As part of today’s Autumn Statement Chancellor Philip Hammond announced a ban on ‘upfront letting agent fees to tenants’ as soon as possible. The government’s intention is to move the cost creating of new tenancies in the private rental sector onto landlords.
Although many of today’s announcements included substance and dates, this one was without detail with no indication given on when the ban is due to be enforced and exactly what it entails.
In truth we don’t make any upfront charges to tenants; we do not take any ‘registration fees’ or ‘non-refundable deposits’ and so the terminology itself needs some clarification.
Because of the lack of detail, we can’t say how this ban will affect us but here is where we stand on the fees we charge tenants:
Our tenant fees have always been fair
At Mountgrange Heritage we have always strived to be fair to both landlords and tenants. We don’t aim to profit from tenant’s fees, merely charge reasonably for the time it takes for us to administer the process.
We strive to be fair for one main reason; both landlords and tenants need to be adequately protected should anything go wrong.
That means taking the time to carry out our due diligence on tenants before letting a landlord’s property to them; this includes checking references which we do in-house to ensure it’s done properly.
As ARLA (Association of Residential Letting Agents) members we have our tenancy agreements regularly checked by lawyers approved by them which in turn means that the agreements are fully compliant with the latest legislation and legally protects both parties.
We spend a lot of time in-house administering, varying and agreeing these documents for each tenancy and our fees reflect that.
If tenancy agreements were drawn up independently and agreed by the landlord and tenant’s lawyers, mirroring what happens in the sales market, the cost would likely be a lot higher.
Transparency in our tenant fees
We are very transparent when it comes to tenants fees and are extremely competitive in the rates we do charge. Very few tenants have ever challenged us on our fees because we are up-front about the service being provided.
Unfortunately because this is an unregulated area, many agents, including big high street brands use tenant’s fees as a chance to make money. It’s those agents that have prompted this ban.
We agree whole-heartedly with the reaction from ARLA today:
“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.
“If these fees are banned, the costs will be passed on to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents. The banning of fees will end up hurting the most, the very people the government intends on helping the most.”
Please do contact me firstname.lastname@example.org if you have any queries or concerns about this news.