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How will a ban on tenant fees charged by letting agents affect you?

This week there has been a lot of industry debate regarding lettings fees for tenancy administration and whether fees to tenants should be banned as part of the Consumer Rights Bill.

Banning tenant fees would mean that, in order to obtain references, produce legally binding and fair contracts, prepare the property inventory, schedule of condition and check-in / check-out reports (needed to ascertain how the deposit should be handled), make amendments to the contract (such as change of tenant) or release tenants from their contract, landlords would have to settle all administration costs.

Whilst I am sure that tenants would initially think this is a great idea, (it would be an immediate saving of £355 (average fees charged) or higher for larger properties (usually because the cost for the inventory checks are much higher) the actual outcome would be quite different.  I would expect that landlords would quickly need to recoup their additional outlay in other ways and, ultimately, rental prices would increase and nobody will be any better off.   Alternatively, tenancies would become far less administrated, with contracts being prepared in favour of the person paying (ie the landlord), with much less detailed inventory processes (or none at all) and far more chance being taken on the quality of references provided, perhaps going back to old-school practices whereby personal references were supplied, often very biased and dubious in their origin.  I would predict that, rather than continue the good work which ARLA and other governing bodies are doing to regulate the lettings industry,  there will be many more rogue agencies cropping up and thousands of tenancies affected by cowboy practices.

Speaking to a tenant earlier today, I was delighted to hear a tale of how, upon seeing the standard and quality of the well prepared inventory he had received (60 pages of words and photos), made him totally appreciate the cost involved in it’s administration and how he wished his previous letting agency had been a regulated agent and had worked to similar practices as us.  Instead, he had been given a sheet of paper on move-in day and told to write down anything untoward (which he put to one side whilst preparing his ‘new home’ party and promptly lost) costing him half of his £1200 deposit at the end of the tenancy…  Having worked in this indrusty for 26 years I remember those practices all too well, and I know that putting in place great administration at the start of a tenancy is far cheaper than the ultimate price paid at the end, hindsight is such great gift to have and I genuinely cannot understand why labour MPs think this huge back-step is every going to be a good idea.

What should be the focus of MPs at the moment, is the regulation of letting agents, so that fees are fair and transparent and that all agents are legally trained and governed by a redress scheme, which of course, is already the situation with Sewell & Gardner.  You can watch the Commons Select Committee video of its report into the Private Rental Sector here.

Our full list of tenant fees are published on our website and are available in our offices, just download our Tenancy Application Booklet Download our fees and charges HERE.


If you would like to read the full House of Commons Debate regarding the proposed new clause 22, and the subsequent vote, which was negatived by a vote of 228 for and 281 against, Click to Read: Commons debate 13 May 2014 Tenant Fees


For more information on renting property see our landlord page or our tenant page