In the 2016 Autumn Statement, Chancellor Phillip Hammond announced a crackdown on letting fees – so what will this mean for the letting industry?
Well, millions of people across England and Wales will benefit from the scrapping of fees, which can sometimes add up to £500 to the cost of renting a property.
What do letting fees cover, and how much are they?
Letting fees usually cover upfront costs that landlords face, such as credit, reference, and inventory checks. These fees have already been banned in Scotland.
Fees average £202, according to the Association of Residential Letting Agents. However, according to Shelter, the housing and homelessness charity, the fees can reach £500 in some cases. Citizens Advice welcomes their removal, saying that over the past few years these fees have risen to ‘unaffordable levels.’
What are the potential consequences of scrapping letting fees?
Some have suggested that rents will rise as a result of this, as landlords could look to cover the costs of the fees through other avenues.
Richard Lambert, Chief Executive of the National Landlords Association, said: ‘Banning letting agent fees will be welcomed by private tenants, at least in the short-term, because they won’t realise that it will boomerang back on them. Agents will have no other option than to shift the fees on to landlords. But adding to landlords’ costs will only push more towards increasing rents.’
However, Shelter, who are in favour of the ban on letting fees, have stated that in Scotland, where the ban is already in place, there has not been a significant increase in rents.
To find out about how the 2016 Autumn Statement will impact the property industry as a whole, read our short summary here.
Looking to let or rent a property? Give the Kingsley Hamilton Estates team a call on 020 7078 0214, or email email@example.com.