Forget Brexit- there is legislation sneaking through that could have serious implications for the community
From the 1st of June 2019, the Tenant Fee Ban is a new legislation that will see the abolishment of some fees tenants currently have to pay. These include: credit checks, inventories, cleaning services, referencing, admin charges, gardening services, charging for a guarantor form, renewal fees, and so on.
Tenants are celebrating, but is this premature?
This sounds great. Less fees, means less to pay. Reality is – this money has to come out of someone’s pocket!
Steven Chippendale, Joint Managing Director of Property Shop said:
“New legislation will result in prohibition of the present fees that tenants cover in the application process of renting a property. With over 4.7 million households in England tenanted* the reduction in upfront costs will be music to many ears – great news for tenants, on the surface, but what does that mean for us as agents?”
Lettings agents and landlords will still be able to charge fees relating to rent, security deposits, holding deposits or breach of contract, but these will be held to additional restrictions as a part of the new legislation.
“On the surface this looks to be brilliant news for those who rent, however the reality is this may come at a different price. If agencies absorb the fees it will mean a lack of income and danger to the business. Whereas is the fees are passed onto the landlord it will mean using an agent for letting is less lucrative, many may turn to private letting instead. Which is obviously bad news for us and potentially bad news for those who rent.
Although this clearly works in some cases and there are some brilliant private landlords, in many situations we do find the tenant can suffer. Without correct management of a property and use of an agency, things like repairs, contracts and the financials are at risk of being overlooked or not done as efficiently, this leaves tenants potentially unprotected.
The pending bill has many agencies feeling apprehensive about potential loss. Letting fees make up £0.7million of the approx. £4 billion made in the lettings sector every year** and as a result smaller, independent, letting agents like Property Shop are likely to be hit hard.
“In order to best prepare for the bill to be passed, we have seen a year of transformation and growth at Property Shop. We knew we would have to develop new revenue streams to prepare to make up for any loss we may suffer. As a result, we are now bringing our knowledge and expertise to property sales, after previously only dealing with lettings.
As an unrivalled letting agent in the area it only felt natural to expand our services. We have invested in new premises’, in new team members, and in new campaigns to reap the benefits the continual success of our company has seen over the last 15 years.
A huge part of maintaining our reputation within the local community as a trustworthy and ideal landlord / selling agent has been via the sponsorship and involvement of numerous events taking place in Accrington and the surrounding areas. This is something we will be continuing with, going forward. It’s important to stay connected, to build relationships, and to illustrate to those already on our books and any considering being that they are in good hands with people who truly care.”
*According to Kingsley Napley, Real Estate Law, December 2018
** According to www.movebubble.com