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The government has announced its intention to ban letting agents from charging fees to tenants of private rented houses.  This would mean that letting agents would only be able to charge the landlords of the properties, who would be the people that had appointed them.

According to government figures, the private rental sector accounts for 19% of all households in the UK, a figure that is set to continue to rise.  The government’s argument is that despite the rise in private renting, it’s not easy for tenants to have a transparent view of what the costs will be when they agree to rent a property.  In addition to this, tenants are not the ones to appoint a letting agent – this is done by a landlord when the property is advertised for let – so they have very little control over what they have to pay to an agent, if they want to rent the property.

What do letting agents do?

Typically, a letting agent will find a tenant for a property and then be responsible for ensuring that rent is collected each month.  They may also be responsible for managing any enquiries in between the tenant and landlord.  These types of enquiries would usually be chargeable to a landlord.

Other types of services that a letting agent usually carries out include obtaining references for a tenant and carrying out an inventory before the tenant moves in.  Whilst these are services that benefit a landlord as well as the tenant, these are usually currently charged to a tenant.

The government’s proposal to ban letting agents from charging fees to tenants aims to make the letting agent marketplace more competitive for tenants.  This should make it easier for tenants to rent properties and to move between rented properties, which in turn could see the private rental marketplace more competitive, too.

What types of things do tenants have to pay for?

When moving into a privately rented home, the types of things that tenants need to budget for can include:

  • A deposit
  • Rent
  • Letting agents’ fees
  • Council tax
  • Utility bills
  • Furniture
  • Fixtures and fittings
  • White goods
  • Items such as a lawnmower to maintain a garden
  • In some cases, solicitors’ fees to amend a lease

This is not an exhaustive list, and in some cases, things like white goods will be provided by the landlord, depending on whether the property is unfurnished, furnished or part-furnished.

Industry views

In an article published on the National Landlords Association (NLA) website, Chris Norris, Head of Policy at the NLA, says:

“It is about time that landlords and agents were given some certainty about the market’s regulatory future – which could be easily achieved by agreeing an over-arching system of regulation for letting agents once and for all…This looks like yet another attempt to affix a sticking plaster to a perceived problem without really understanding what is driving behaviour in the real world.”

What do you think?  The government wants your opinion

Do you think that the government’s proposed plans will only serve to make the lettings process more expensive for landlords, or will you welcome the opportunity for a more competitive marketplace?

An online survey has been set up by the government to encourage opinions about their proposed ban of letting agent fees for tenants.  The deadline to submit responses or questions is 7th June.  To have your say, visit: https://www.surveymonkey.co.uk/r/dclglet.

At Bray & Bray our teams of property solicitors specialise in renting, buying and selling either residential or commercial properties.  To speak to an expert in either field, contact us using the telephone numbers below: