Government signals end to tenant fees
An end to the charging of tenant fees has been signalled by the government, with this legislative step being announced in the Queen's Speech.
The Draft Tenants' Fees Bill will ban the charging of letting fees, following a public consultation concluded before the general election. This will bring England and Wales into line with Scotland, where letting fees have already been banned.
It is aimed at helping make renting more affordable for tenants, not just by removing the fee, but by improving transparency. The government's investigations into the issue found that there was a wide variation in the level of charges for similar services. Indeed, while the English Housing Survey found the average letting fee charged in 2014-15 was £223 per tenancy, housing charity Shelter found one in every seven tenants has to pay over £500.
Finding this money has proved difficult for some, with Citizens Advice finding 64 per cent of tenants have had problems getting the cash together and 42 per cent have had to borrow money to pay the fee.
However, some agents are unhappy with the news. David Cox, the chief executive of ARLA Propertymark, said: "A ban on letting agent fees will cost the sector jobs, make buy-to-let investment even less attractive, and ultimately result in the costs being passed on to tenants."
He argued that the measure will cost 400,000 jobs and the average rent will rise by £103 a year as a result.
The new bill was not the only housing measure announced in the Queen's Speech. The promotion of "fairness and transparency" will affect both the rental and owner-occupier sectors, as will the pledge to build more homes.
In its election manifesto, the Conservative Party pledged to continue with its aim of building a million new homes between 2015 and 2020, plus half a million more by 2022.