It's been widely rumoured, especially after the introduction of the ban in Scotland, but the Chancellor has now announced that letting agents' fees are to be banned. It's a move that's likely to be popular with the country's 4 million renters, but which will have a significant effect on the sector.
We had hoped that there would have been regulation introduced. Limiting the fees to a reasonable and clearly communicated amount would make sense, but this is not to be the case. The few agents who have charged over-the-top fees have caused a problem for others who have levied a reasonable sum. References, Right-to-Rent checks and tenancy agreements do have a cost, and somebody has to pay it. If the agency cannot absorb it, and it cannot be charged to tenants, the burden will be passed to the landlord in increased agency fees.
Landlords, of course, can shop around, and faced with increased fees, this is understandable. They are already facing changes which prevent their business expenses being offset for tax purposes, and this is another blow. It's highly likely that the extra costs in a stretched sector will finally be translated into higher rents and ultimately, the tenant will end up paying the bill.
Once again, the property rental industry seems to be taking a battering. The ban, however, is likely to be subject to a period of consultation before legislation to enact it can be passed. We'll be keeping a close eye on developments