Has the tenant fee ban been helpful to tenants?
On 01 June this year, a ban on charging tenants fees for administering their let came into force for new tenancies. While it’s still early days, what’s been the impact on tenants so far?
Well, in August, the BBC reported that the main effect on tenants seemed to have been confusion!
- Citizens Advice said enquiries about tenant fees had risen by 54%
- The Property Redress Scheme estimated enquiries from tenants had doubled
- The Property Ombudsman received 68 calls in the first month, mainly from renters unsure as to whether the new law applied to existing tenancies
The financial effect
Some letting agents are reporting that landlords have simply raised rents to cover their increased costs.
If we look at Scotland, where charging tenants any fees has been illegal since November 2012, it’s hard to see a demonstrable effect on rent prices, which have continued to be influenced simply by supply and demand.
Mike Campbell, Director of the Council of Letting Agents in Scotland, points out that there is a difference between the situation in the two countries: “Most agents in Scotland charged about £50 in tenant fees per tenancy and those fees accounted for about 6% to 8% of their income. In contrast, average fees in England tend to be several hundred pounds and account for 12-15% of agent income.” As a result, there is a greater pressure on agents and landlords south of the border to try to recoup the loss.
As professional agents, we’re always looking to secure the best possible market rent for our landlords, while ensuring the price is not so high that tenants are deterred from viewing a property.
We recommend that you regularly review your rent. Book a free lettings review with one of our expert lettings managers who can discuss the local lettings market with you and review the rent you are receiving.