Five Warnings for 2018 – #5 The Tenant Fee Ban

I'm sorry but non of the solutions are really solutions and only time will tell of the affects.

It cannot be denied that tenants change their mind and the overt and covert costs of withdrawal and consequent delays on letting can be substantial, will we see a rise in multiple reservations on a fptp basis.

If I go into a solicitor's or accountant's office I may be offered a fixed fee, no sale no fee, or an hourly rate by agreement, why should tenants be uniquely protected when requesting professional services?

Further than that is the idealogical conflict between this proposal and that followed in consumer finance by the FSA/FCA.

That regulator has banned commission to be replaced by a clear and broken down fee structure, at some levels every element of say a fund manager's charges and remuneration must be identifiable.

The proposal to ban fees to tenants which may be responded to by landlords increasing rents is tantamount to hiding the cost of fees, daft.

We do self manage, do charge fees, and 100% clear. With the initial fee ban we may have to look at the level and breadth of subsequent charges and our levels of tolerance of transgressions.

It will be interesting to see how the no fees, pet loving, redecorating, and flexi tenancy rtr crowd fare, don't hold your breath

Estate agents never used to charge tenants fees and I don't think that landlord fees have got any cheaper.
As a landlord I pay an agent to find the best tenant for the price, not to find that they have reduced the pool of possible tenants by charging fees.

The Total ban on fees is ridiculous.
Why not set maximum fees instead?

Many Lettings agencies share the same building as Estate agents, where one desk will be able to charge for a service and the other won’t.

To tell anybody that they cannot charge for their time is an absolute disgrace.

Tenants object to everything that costs money, no kidding Sherlock?

The cost never goes away, it will be there in one form or another.

This is a political gimmick, just like Section 24 and will just add to a landlords problems.

The Tory party is pandering to idiots and not it’s core beliefs, because it hasn’t got any beliefs anymore, such as competition and fair taxation.

"The main problem for landlords is that agents’ fees look set to become more expensive"

No it isn't.

The main problem is a total ban will allow professional rogue tenants to fish around with impunity until they find a sucker.

A rogue tenants charter from those that don't understand the industry.

Holding fees an effective deterrent? HO! HO! HO!

"Raising rents is one answer but in an economy where wages are static or even diminishing, there is a limit to how far you can hike up rents."

There is a limit but we are nowhere near there yet.

The population is increasing and supply is not keeping up with demand.

Tenants who could afford a 4 bed property will rent a 3 bed, 3 bed tenants a 2 bed, etc, all the way down the line to the bottom of the heap and an inevitable increase in slum landlords and overcrowding.

What the do-gooders fail to realise is that punitively taxing landlords, banning fees, preventing evictions etc has a price to pay. Inevitably it is the weakest in society that pay it.

"The final solution, and one which I think many landlords are taking, is to sell up.  Which is fair enough.  More property may then become available for desperate first-time buyers."
Less property may be built, less commercial property may be converted to residential, less property may be brought back in to use.
Still, as long as the relatively well off first-time buyers can buy the property they deserve (in the short term), who gives a damn about the poor sods who will never be able to buy?

The claims about conflict of interests do not reflect reality, and the focus on letting agents is just spin to score political points. We have seen that from both main parties.

As it stands letting agents indeed work for landlords and already may not charge tenants anything unless instructed or authorised by landlords.

Letting agents do not advise both parties.

It is for landlords to keep on top of things and control their agents.

In any case, the proposed ban is NOT a letting agent fees ban. It's a ban on landlords as landlords will explicitly be banned from charging tenants even if they do not use agents at all.

The argument against letting agents' practices does not therefore hold up to scrutiny of the bill.

This is political, and only political.

Reply to the comment left by Romain Garcin at 24/12/2017 - 10:48
"In any case, the proposed ban is NOT a letting agent fees ban. It's a ban on landlords as landlords will explicitly be banned from charging tenants even if they do not use agents at all."

Good point Romain, makes a nonsense of the 'conflict of interest' justification.

I have no problem with banning tenant's fees. When I work with agencies I am horrified at the fees they charge tenants particularly when this includes charging both parties for the same thing e.g. the inventory, tenancy renewals.

While I agree that there is no excuse in extortionate admin fees by agents, I think it's outrageous not to be able to charge tenants for referencing fees and credit checks. Fine, create rules about the maximum level of these, but to pass them onto the landlord is ridiculous. We've had tenants lying about their credit status and subsequently failing their checks - the ban will only encourage this sort of behaviour if tenants have nothing to lose in doing so. Why should the landlord pay for this?