Tenant lobby group Generation Rent has welcomed the Government’s letting agent fee ban, which was announced in yesterday’s Autumn Statement.
Letting agent fee ban
In response to the announcement, the Director of Generation Rent, Betsy Dillner, exclaimed: “The case against letting fees has become unanswerable, so it is fantastic news that the Government has decided to ban them. Tenants are a captive market for letting agents who can charge fees that bear no relation to the true cost of their service. Some agents are getting away with charging a couple more than £700 at the start of a tenancy.
“These costs are making it impossible for some tenants to move out of unsuitable homes. By removing this market barrier, the Government will force negligent landlords to up their game.”
She insists: “The letting agent’s costs should be paid by their customer anyway – the landlord. With more choice over who they use than tenants have, landlords would be more able to force down excessive costs.
“This will not fix the problems with renting overnight – rents will continue to be oppressively expensive, and tenants have little certainty over their home in the longer term.”
So will the letting agent fee ban ultimately lead to higher rents for tenants? If you are forced to put your rents up as a result of the ban, you must be aware that this may cause financial difficulty for your tenants. In order to protect the rental income you receive, you must have Rent Guarantee Insurance in place. Our policy covers rent arrears of up to £50,000 – can you afford to miss out?
Dillner comments on the Chancellor’s other Autumn Statement announcements regarding housing:
Affordable housing funding
“The Government’s previous obsession with homeownership meant that funding wasn’t getting to the people most in need of affordable housing. By giving builders more flexibility over what tenure of homes they build, the Government has made it easier to provide homes for people on the lowest incomes, but there’s still more they could do. The 40,000 homes to be built over four years won’t make a big difference – through new taxes on landlords, the Government is raising enough to fund 40,000 new homes every year.”
Despite positive movement on the housebuilding front, has the Government delivered yet more empty promises?
NS&I investment bond
“It is encouraging to see the Government offering a new interest paying bond for people of working age. Private renters currently have £3.6 billion tied up in tenancy deposits, and they are earning no interest on this. We hope the Government considers how this cash can support public investment, while giving renters a reasonable return.”
“We welcome the investment in 90,000 homes for London, but, to have the biggest impact, they need to be for low-cost rent. There is still a big shortfall in the number of homes the capital needs, and London’s private renters need immediate action to give them greater security.”
What do you think of the Chancellor’s Autumn Statement plans?