Letting fees ban set to go ahead, but no timeline specified

One of the most contentious issues in the lettings industry at present is the proposed ban on letting agents’ fees to tenants.

Theresa May, despite losing her majority at the recent general election and presiding over a weakened government propped up by the DUP, is determined to introduce the ban even in the face of heavy opposition from the industry and various trade bodies.

She recently confirmed that her minority government will press ahead with the ban on letting agents’ fees levied on tenants in England. However, she didn’t commit herself to a timeline of when the ban would actually be introduced – and how long the industry would have to adapt and change their processes.

The confirmation came about at a recent PMQs, when Alex Cunningham, the Labour MP for Stockton North, told the Prime Minister that one of his constituents paid a £300 ‘house reservation fee’ to a named letting agency which was not going to be refunded. This was, Cunningham explained, despite the agent’s landlord client withdrawing from the contract.

“She now faces paying another letting agent a non-refundable fee of £650 to secure a different property,” the MP told the House of Commons, before urging Theresa May to act immediately and put a stop “to these rip-off fees”.

In response, May said the Conservatives had made a pledge in the recent Queen’s Speech and would act accordingly to implement the new measures. However, when she was pressed on a timescale, she did not give a specific answer.

“We recognise these issues...We need to ensure that anything we bring forward...that we get right, that it’s actually going to work,” was her rather non-committal reply.

The fees ban – and the fierce debate surrounding it – has dominated the lettings world ever since the controversial move was announced in Philip Hammond’s first Autumn Statement in November last year. It was reasserted in the government’s Housing White Paper in February, formed part of the Tory manifesto in the lead-up to the snap general. A consultation period, which ended during the general election, was held, but no information on the contents of the consultation has yet been released.

Many in the industry hoped that May’s failure to secure a majority might see the plans put into the long grass, but the recent Queen’s Speech and May’s response at PMQs seems to have put paid to that.

The draft Tenants’ Fees Ban bill, which formed part of the Queen’s Speech, contained a reference to “banning landlords and agents from requiring tenants to pay letting fees as a condition of their tenancy”. It also hinted that, subject to parliamentary approval, tenants may be able to recover fees that had been unlawfully charged.

Given the proposed ban has formed a key part of the Autumn Statement, the Housing White Paper, the Tory manifesto and the recently passed Queen’s Speech, the chances of it not now going ahead appear slim. Nonetheless, the pressure from industry bodies and those against the ban continues to be intense, with the argument being that tenants – the intended beneficiaries of the ban – will actually be hit hardest by the move in the form of higher rents. Letting agents argue they will have no choice but to increase their management fees to offset any potential losses; in turn, landlords will have to increase rents to pay for higher management fees.

Supporters of the ban, however, point to Scotland – where a tenant fees ban has been in place since 2012 and there has been no noticeable rise in rents or major side-effects for letting agents and landlords – as evidence that such measures can successfully be introduced.

It’s certainly a considerable issue for letting agents to contend with, though, and the uncertainty over when the ban will be implemented – and what exactly the terms and conditions of the ban will be – is helping no-one.

At Gnomen, on the other hand, we can give you certainty when it comes to brilliant property software and great-looking websites. Our all-in-one, cloud-based software allows you to manage all aspects of your business – from your staff, offices and marketing to your social media, diary, valuations and customers – in one place, at the click of a button, from anywhere in the world.

If you’re a busy letting agent eager to please landlords and tenants alike, our tailored login areas will enable you to keep them happy, informed and engaged. For landlords, this means the ability to add properties, view scheduled inspections and download inspection reports, while tenants can view their upcoming rent, make rental payments and report any maintenance issues.

As for websites, we offer a range of innovative designs (bespoke or otherwise) to meet the needs of all estate and letting agents. A fast, interactive, beautiful-looking website is so crucial in this day and age, when so many of us live our lives online. To stay ahead of the competition, your website needs to look as good on mobile and tablets as it does on desktops, it needs to be properly integrated with your social media platforms and it needs to have a content management system that is simple, intuitive and easy to get your head around.

For more information, please get in touch with us on 0208 123 9019 or book a free demo here.

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Montana H

Business Development Director