Letting Agent Fees to be Banned in Autumn Statement
By |Published On: 23rd November 2016|

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Letting Agent Fees to be Banned in Autumn Statement

By |Published On: 23rd November 2016|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

It is now widely expected that Chancellor Philip Hammond is to announce a ban on letting agent fees charged to tenants in today’s Autumn Statement.

Presently, tenants can be charged substantial fees for a number of administration tasks, such as conducting reference and Right to Rent checks.

Ban on letting agent fees

Mr Hammond believes that by shifting these costs to landlords, 4.3 million households could save hundreds of pounds.

He also feels that this move could increase competition amongst landlords, who can now search around for the cheapest agent.

However, the move has not gone down well within the industry.

Richard Lambert, Chief Executive Officer at the National Landlords Association, said: ‘The new Chancellor is clearly aware of the pressures facing those living in the private-rented sector, but in attempting to improve affordability he has shown that, like his predecessor, he lacks an understanding of how the whole sector works.’[1]

‘There’s no doubt that some unscrupulous agents have got away with excessive fees and double-charging landlords and tenants for far too long.  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.’[1

Mr Lambert feels that as a result of the changes, ‘Agents will have no other option than to shift the fees on to landlords, which many will argue is more appropriate, since the landlord employs the agent.  But adding to landlords’ costs, on top of restricting their ability to deduct their business costs from their taxable income, will only push more towards increasing rents.’[1]

Letting Agent Fees to be Banned in Autumn Statement

Letting Agent Fees to be Banned in Autumn Statement

Increased costs for landlords

Richard Price, Executive Director at the UK Association of Letting Agents commented: ‘Arbitrary bans sound appealing as a quick fix, but the problem of affordability in the private-rented sector cannot be addressed by preventing legitimate businesses from charging for their services.’[1

‘A ban on agent fees may prevent tenants from receiving a bill at the start of the tenancy, but the unavoidable outcome will be an increase in the proportion of costs which will be met by landlords, which in turn will be passed on to tenants through higher rents,’ he continued.[1]

David Cox, Managing Director of the Association of Residential Letting Agents, described the ban on letting agent fees as a, ‘draconian measure,’ which will have, ‘a profoundly negative impact on the rental market.’[2]

‘It will be the forth assault on the sector in just over a year and do little to help cash-poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account. Most letting agents do not profit from fees.’[2]


However, Campbell Robb, chief executive of Shelter, observed that: ‘Millions of renters in England have felt the financial strain of unfair letting agent fees for far too long, so we are delighted with the Government’s decision to ban them. We have long been campaigning on this issue and it is great to see that the Government has taken note.’[2]

[1] http://www.landlords.org.uk/news-campaigns/news/hammonds-rental-boomerang-industry-bodies-respond-ban-on-letting-fees

[2] http://www.bbc.co.uk/news/business-38065249


About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

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