When Chancellor of the Exchequer Philip Hammond announced in November’s Autumn Statement that he planned to impose a ban on tenants’ admin fees in England and Wales, as many as 4.3 million renters were promised to benefit from the ruling.
Statistics generated in a study by the Citizens Advice Bureau indicated an increase of up to 60% in lettings fees over the past five years, with some renters paying well in advance of £700 for relatively basic administrative support.
Before the millennium, however, many lettings agencies refrained from charging fees to their tenants, and the upsurge over the past decade has been an organic trend, as opposed to a regulated process.
Economy experts state that the fee ban could take up to two years to fall into place, but leasing agencies are generally dissatisfied that the policy – which has been common practice in Scotland for over two years now – was employed without prior industry consultation.
Though the strategy, in principal, will prove largely beneficial to renters, Managing Director of the Association of Residential Lettings Agents, David Cox, claims: “If fees are banned, these 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 very people the Government intends on helping the most.”
Even if landlords do opt to increase their rates as is widely-expected, the costs are likely to instead be spread out over the duration of a secure tenancy. This means renters won’t be required to pay hundreds of pounds upfront, and it is thought that the proposal will give clarity to residents as to how much the tenancy will cost, without having to navigate the grey areas of letting agent fees, where surprises – namely big-money, unforeseen contractual sums - can jump from the shadows.
And while positives to take from 2016 are few and far between, here’s hoping Hammond’s modification of the property market leads to a more financially-amicable 2017.
Mansons do charge a fee for their services, but have always felt it important to be transparent about any costs, before, during and after a tenancy. They are prominently displayed in the office and on our website https://www.mansons.net/tenant-fees.
To get in touch with one of our letting agents please contact Mansons on;
TEL: 0191 209 222