Letting agent fee ban to see rents spiral by £255 a year

Ryan Bembridge

November 23, 2016

philiphammond

haart estate agents predict the ban on letting agent fees to see rents increase by an extra £255 a year.

Chancellor Philip Hammond (pictured) is expected to make the announcement as part of the Autumn Statement shortly.

Paul Smith, chief executive of haart, said: “Today’s news of a ban in letting agent’s upfront fees is yet another unwelcome and haphazard government intervention in the rental market, which will sadly only lead to a backdoor rent rise for tenants.

Annual house price growth continues to slow

“The cost of administration such as references and inventories that tenant fees would have previously covered are now likely to be passed onto the tenant through their rent.

“We estimate that rents will on average increase by £21.25 per month, which is an extra £255 a year, as a direct result of this change – with tenants in London likely to be much worse off.”

Nick Leeming, chairman at letting agent Jackson-Stops & Staff, said: “While the announcement of the abolishment of lettings fees appears to be good news for renters, experience shows that any savings to the tenant will likely be passed on to the landlord who in turn could then pass them back on to the tenant through increased rent as they seek to cover their costs.

“This legislation is short sighted and is yet a further challenge to landlords who have faced a barrage of increased costs over recent months, including the additional 3% stamp duty land tax levied when they purchase a rental property and also the abolishment of mortgage interest rate relief which is set to commence in April next year.”

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