My 100th roundup – if we have the numbering right. Most of this weeks housing news is about
The Tenant Fees Act 2019
The tenant Fees Act is due to come into force tomorrow, 1 June. However, most news items are fairly negative about its effect.
There has been a lot of talk within the property industry that landlords will increase rent prices as a result of the tenant fees ban, as they look to recoup potentially higher charges imposed by letting agents.
It is clear that our respondents felt the same.
Rents will go up, causing the Government’s efforts to make renting cheaper fall flat on its face
The survey found that
- 17% thought the act would increase fees
- 41% were aware of the ban but sceptical as to how they would benefit, and
- 49% believe that rents will go up.
The Negotiator reports Hunters CEO Glynis Frew warning that well-intentioned government legislation all too often ends up with undesirable consequences
It’s frustrating because the industry and government are actually joined up in their desire to ensure that tenants get a fair and honest deal,” she says.
A small number of rogue agents or landlords have charged mind-boggling fees over the years, that’s a sad reality, but that’s not a fair reflection of the industry as a whole.
Market forces will take their natural course and rent increases are likely to follow in many locations, especially where tenant demand is strongly outstripping supply.
She also criticises the revolving door of 17 housing ministers over the past 20 years, saying.
Not one has managed to build the number of homes the country is purported to need to satisfy demand and keep property affordable. Maybe, just maybe, if we had a Housing Minster that stayed long enough to understand the industry and the market, we would all do so much better.
Amen to that.
ARLA Property CEO is reported as saying:
For renters, the ban on tenant fees, which takes effect this weekend, will sound positive. However, it won’t save them money in the long run.
Tenants will continue to pay the same level as before, but this will be passed on to them through increased rents, rather than upfront costs.
Research we conducted with Capital Economics revealed the fees ban will increase the average rent for tenants by approximately £103 per year.
While those who stay in tenancies for less than two and a half years will see savings, those in long-term tenancies, which tend to be lower-income families, will suffer.
Based on an average rent increase of £103, those in tenancies for ten years or more will lose out by £755
I also made a few comments in my post yesterday.
I suspect that some of the main results of the ban will be
- Agents increasing their rents to landlords many of whom will decide to self manage to save money
- Agents who have formerly charged high tenant fees getting into financial difficulties
- Rents going up for tenants so landlords can recoup the extra fees charged by their agents
- Self-managing landlords charging fees of £50 where they formerly would not have charged anything
- Landlords who self manage because they can no longer afford agents fees getting into difficulties (they should consider using Landlord Law)
- More landlords selling up and exiting the market
There is a probability though that many agents will continue as before either deliberately or because they are not aware of the new act. Although if so – Generation Rent will be watching out and reporting non-compliant agents.
Shop your agent
Generation Rent has set up an online form where people can report non-compliant and Criminal letting agents here.
However, it’s not just Generation Rent who want non-compliant agents caught. ARLA Propertymark CEO has urged all its members to report agents who are not compliant to the authorities. Compliance with the law is costly and it is unfair on compliant firms if non-complaint firms are allowed to carry on unchecked.
So if you find an agency charging a prohibited fee – shop them.
Where do you report non-compliant agents?
- Use the Generation Rent form
- Contact ARLA Propertymark and let them know. I can’t see a special form, so use their general contact form here.
- Your local trading standards office – you can find them here.
- The new Enforcement Agency in Bristol although they don’t seem to have much on their website yet. The only contact appears to be the Powys email address of email@example.com.
Don’t forget the deposit rules
From tomorrow only 5 weeks deposit can be taken, or 6 weeks for properties with an annual rent of over £50,000. We have a handy calculator form you can use to work out what to charge, or, if you are a tenant, to check whether your landlord or agent has charged too much.
You can also put it our form on your own website if you want. Just copy the embed code.
- TPO has issued new codes of guidance to take into account the new Tenant Fees ban and also a requirement to reveal referral fees
- Housing Minister Kit Malthouse has joined the race to be Tory leader
- Sadiq Khan has set up a panel to tackle housing issues in London
- New report says the North needs ‘transformational vision’ on housing
- More Council houses than expected to be built in Barking and Dagenham
Newsround will be back next week.