Our clients views on the Chancellor’s announcement to ban letting agents fees to tenants:
Lucy Morton, Head of Agency at JLL, comments:
“Charges made by letting agents to tenants at the commencement of their tenancies should have been levied only to cover reasonable administration and referencing costs. However, this has been abused by some agents who have been overcharging for their gain and to the detriment of tenants so the Government has now acted and banned letting agents from making these charges.
“Reasonable charges including referencing costs may now be charged to landlords which in turn, could have a knock on effect on yields, so may then be added to the annual rent. It is essential that agents do not cut corners and fail to carry out stringent referencing checks.
“At JLL and W.A.Ellis, we have always advocated complete transparency of all charges made by agents to both landlords and tenants. We have also historically campaigned for the Government to regulate letting agents which it still fails to address.”
Camilla Dell, Managing Partner of independent property buying agency, Black Brick, comments: “The government wants to be seen as helping those who need to rent by banning lettings fees to tenants, however, it’s likely that landlords will simply pass this cost on through increased rents.
“In reality, these costs are minimal over the term of a year’s tenancy so they won’t make a huge difference to the overall yield/costs that a landlord bears on a property. However, by implementing further red tape such as “right to rent” checks on to landlords, and now insisting they have to pay for them, it seems like government wants to have its cake and eat it.”