Landlords rather than tenants will soon be liable for the costs of letting their rental property, so what implications does this have?
In his first Autumn Statement under May’s government, Philip Hammond announced, “We’ve seen these fees spiral despite attempts to regulate them.” He went on to say that, “Landlords appoint letting agents and landlords should meet their fees.” This has caused a bit of stir for various reasons and the debate will continue long after the legislation is implemented, but what are the implications of this for tenants?
The good points for tenants
For a long time, tenants have been ripped off by some letting agents charging them astronomical fees for what amounts to very little in return. Some letting agents charge tenants up to £300 for a reference – At Quarters Student Accommodation we have always believed in fair pricing for our referencing and credit checks, and therefore as a tenant you’ll only ever be charged £50 for an application for a property, whether you’re a group of 6 or an individual. This includes everything you need from a credit and right to rent checks, to drawing up the tenancy and checking in / out. So the good news is that prospective tenants of many agencies may be much better off and not having to fork out hundreds of pounds just for the privilege of putting a roof over their head.
Of course, letting agents will have to subsidize any lost income they lose from this move, and will probably result in the costs being moved to the landlord, who lets face it, also isn’t going to like it. We imagine its likely that the landlords will push up their rent to cushion the impact of any fee increase from agents.
If rents are increased this may help short term renters such as students as they wont have to pay for a reference check upfront, however the landlord will. In essence any change in costs to initially renting a property will be deferred into the rent, so any fees expected upfront now, will soon be payed over the course of the rental term.
What do you think?
With rents on the rise in the UK do you think this is a good move or a bad move from the government? Should it be a tenants responsibility to pay the fees to prove their eligibility to rent a property? Should the government create a department solely for the referencing the agents require with flat rates? Or should the government simply introduce application fee caps? Leave your comments below!!