Lettings fees to be banned.
On 23rd November 2016 the Chancellor, Philip Hammond, announced that a government ban on all letting fees charged to tenants would be rolled out across England.
Since then it has been confirmed in the 2017 Queen’s Speech that a draft Tenants’ Fees Bill will be published this Autumn.
No More Unlawful Fees
The chancellor, Philip Hammond, previously said that 4.3m households pay such fees every year and that cost is on average £500.00, London tenants have seen fees as high as £2000.00.
The fees usually to cover expenses such as credit checks, references and investigating immigration status.
Not only will tenants no longer have to deal with the fees there will also be provision for tenants to recover unlawfully charged fees.
However it has not been stated if the ban will effect existing fees retrospectively.
Rent increases ?
When this bill comes into effect the fear is that landlords will put up rents to cover this loss, it is suggested that rents could rise by around £103.00 a year hitting long terms tenants.
However fees in Scotland have been banned since 2012 and figures show there has been no significant increase in rents since the ban.
Some landlords may increase the deposit costs to limit the risk of renting to high risk tenants. This will probably price those people struggling most out of the market.
It may make buy-to-let property investment less attractive, however the worry is that the cost will effectivly passed on to the tenant.