The banning of letting agents fees, currently payable by tenants, was debated in Westminster Hall yesterday.
The main points discussed on a letting fees ban, which are likely to be implemented are as follows;
Landlords are to join a government redress scheme to which tenants can make a complaint about their Landlord. Currently all letting agents have to be part of one of these schemes and where a complaint is made, we have to pay the scheme a fee of £300 for them to adjudicate the complaint, even if it is judged in our favour. The complainants do not have to pay a fee.
It is being considered to cap the level of deposits that can be taken at the outset of a tenancy to just one month’s rent, leaving landlords further exposed. There was some objection to this, so watch this space for the outcome.
Referencing/Inventories/Check in’s/Check outs/Renewals
The contributors to the debate were all adamant that the full cost of these should be paid by the Landlord and not the tenant.
A tenant is likely to need to pay a holding or reservation fee, which is deductible from the first month’s rent if the tenancy proceeds. However, if the tenant pulls out after referencing fees have been incurred by the Landlord, then these can be recovered from the holding fee.
How to Let Guide
An MP is working on producing this guide for Landlords and Agents. It will be similar to the How to Rent Guide that must be provided to tenants at the beginning of a tenancy.
Local Authorities will be given powers to ban Landlords from letting property if they are found to be contravening the laws.
Let Only Landlords
Those Landlords that self-let are not currently required to lodge the deposit with a third party. The requirement is only to insure the deposit. The debate showed concern that Landlords could abuse this at the end of the tenancy when considering deductions. This matter will not go away so expect changes.
The Government is concerned that increased costs to Landlords will be passed on to tenants through increased rents. This is inevitable, it is just a matter as to how much.
The government has agreed to look into producing a tenant ‘passport scheme’ whereby a prospective tenant has already been referenced and approved (similar to an ‘agreement in principle’ for a mortgage). We do not know the details of this yet but will keep you informed.
Walton & Allen is a letting agent in the East Midlands based in Nottingham. We are committed to protect our existing Landlords and lobby the various authorities.