Tenant Fees Bill may lead to rent rises
According to the Residential Landlords Association (RLA), the government’s Tenant Fees Bill now introduced to the Commons is a ‘missed opportunity’ to make quicker and more lasting improvements in the rental market.
As part of reform of the private rental sector, The Bill means that tenants are now one step closer to seeing letting fees banned. However, RLA argues that changes should have been made to better enforce existing regulations designed to improve transparency around letting agent fees.
The law has compelled letting agents to publish details of the fees they charge since May 2015. Agents breaking this law can be fined up to £5,000.
However, 93% of councils had failed to issue a single financial penalty to a letting agent for breaching the law, according to data published last year by the National Approved Letting Scheme.
There are now concerns that the fees ban will simply shift the cost of all the letting agent fees on to the landlords, and if that were to happen, it would leave most landlords with no choice but to further increase rents, as letting agents look to pass existing tenant fees onto landlords.
“With warnings that the policy could lead to rent rises, there is a very real danger that whilst cutting the upfront costs of renting, tenants will find themselves paying them through higher rents on a permanent basis,” said the RLA’s policy director, David Smith.
The RLA is calling for immediate action to better enforce the law as it currently stands, including the government using powers it has so far failed to use to force agents to display the fees they charge in more prominent positions and specify them in much greater detail.
Soucre: Landlord Today