It's been a long time coming, and has provoked plenty of debate criticism since Philip Hammond first put the proposals forward to ban letting fees in his November 2016 Autumn Statement, but the Tenant Fees Act finally comes into play on June 1.
Once it's implemented, it will be illegal for landlords and agents to charge a number of upfront fees - including those for administration, referencing, renewal and inventories - while there will also be a cap on security and holding deposits.
Landlords and agents are permitted to ask a tenant to pay a refundable security deposit, capped at no more than five weeks' rent for rentals below £50,000 a year, or six weeks' rent where the annual rental is £50,000 or above.
Tenants can also be charged for a refundable holding deposit (used to reserve a property), but this must be capped at one week's rent.
Aside from rent and deposits, the only other fees landlords and agents can charge for once the new Act has been implemented are default fees (for lost keys or security device and late payment of rent), early termination (capped at the landlord's loss or an agent's reasonable incurred cost), changes to the tenancy (capped at £50 or reasonable costs if higher) and council tax, utility and communication services.
The letting fees ban will be policed by the newly enlarged National Trading Standards Estate and Letting Agency Team (NTSELAT), with Bristol City Council acting as the lead enforcement authority for the purposes of the Tenant Fees Act 2019.
It has produced a handy guidance document for agents and landlords to ensure that obligations are met and that compliance isn't an issue.
The new legislation is undoubtedly a huge overhaul and will transform the private rented sector as we currently know it.
Supporters of the ban say it will make things fairer, simpler and more transparent for renters, while opponents point to the damage it could do to letting agents and insist that the ban will hit hardest the people it's designed to help - suggesting that agents will increase their management fees, which in turn will lead to landlords upping the rents they charge. All of which means tenants could end up paying more, not less, as a result of the ban.
However, it needn't all be doom and gloom. With a bit of innovation, embracing of new tech and streamlining of your daily processes, the fees ban needn't be harmful to your business.
While agents have been warned far in advance to prepare for the fees ban and the loss in revenue it could cause - seeking alternative revenue streams such as offering expert advice to the Build to Rent sector or bespoke short-term letting management services - streamlining and improving operational efficiency are just as important.
If you can keep your overheads and admin costs to a minimum and your productivity to a maximum, you'll be able to offer your clients a great service and convince them to stay with you, even if a higher fee now needs to be attached.
It will be an increasingly competitive field once the fees ban is in play - with lots of lettings businesses and property management firms fighting it out to keep hold of clients and win new custom - and this is where it's vital that you stand out from the crowd, offering clients something innovative that can convince them that their rental portfolio will thrive despite the rising number of challenges posed.
Streamlining your processes and improving operational efficiency may also mean that you don't need to charge higher management fees. We can look to Scotland, for example, where a fees ban has been in place since 2012, and see that there been no noticeable hit to the lettings market.
In a similar way to the existential threats to buy-to-let in recent years triggered by the extra 3% stamp duty surcharge and the phasing out of mortgage interest tax relief, and the chronic uncertainty surrounding Brexit, you may find that you are able to adapt, evolve and find ways of coping with the ban which don't involve hiking up your fees.
PropTech can be a key solution to the potential issues caused by the fees ban, and in particular all-in-one, cloud-based software which enables you to work smarter, offer your clients a better service and have all your processes in one easy to manage place.
Here at Gnomen, our advanced property software allows you stay on top of your diary, valuations, marketing and property management in a seamless, trouble-free manner, while we also provide full office accounting to ensure you know your margins, bottom line and profits.
You can set lettings targets, keep on top of you and your team's workload and access the property management software on-the-go and in-the-cloud, from any device, from anywhere in the world.
Our software also makes it easier to enhance team productivity and ensure operational efficiency through performance tracking (KPI), customisable workflows and an office diary which can be synced to ioS, Android and Outlook.
What's more, our powerful integrations - which allow for tenant referencing, automated marketing and electronic document signing - can help you and your landlords to thrive even in the face of the fees ban and other challenges.
Working smarter and more efficiently - all made possible with the right software and a slick, well-designed website - can help you to see the fees ban as an opportunity rather than an existential crisis.
To find out more about what we can do for you, and how we can help you to overcome the challenges posed by the fees ban, please call 0208 123 9019 or book a free demo here.