Lettings Legislation Changes: The Letting Agent Fee Ban
A ban on fees charged by letting agents and landlords with regards to tenancy agreements has been scheduled for 2019 by the government.
At the moment, tenants are charged a fee for the work required in order to set up their tenancy agreement including credit checks, referencing and inventories. Reputable agents will only charge tenants fees in order to cover the costs of this work (often around £150 - £175) however some agents, often in London, have been charging huge fees.
This proposed change in legislation is seeking to protect tenants from this kind of behaviour and will abolish all of these charges. Holding deposits, rent and charges for defaulting on the contract will be exempt.
It is difficult to know exactly what the impact of the new legislation will be, however given that these checks will still be required, somebody will have to pay for them. It is widely presumed that this will happen through an increase in rental prices as landlords seek to recuperate the costs that way. Alternatively, some agents may start asking that tenants are pre-referenced before they can apply for a property.
Our advice is to ensure that you always use a reputable letting agent that is a member of the Association of Residential Letting Agents (ARLA) and the Ombudsman For Estate Agents Scheme. This means that the agent is fully regulated and has to maintain the highest professional and legal standards and will ensure you are not ripped off whatever the outcome may be!