Tenant fees to be banned 01/06/2019
If you are renting your home then the 01st of June 2019 should be a day to remember! The Government ban on Landlords and Letting Agents charging fees to tenants comes into force.
This means no more administration fees, referencing fees, contract renewal fees, check in fees, check out fees, etc, it seemed like there was a fee for everything and its all over.
What does it mean for tenants?
From the 01/06/2019 you will be able to rent a property or renew your contract without being charged by the landlord or agent.
This is expected to save tenants around £400 in tenancy set up costs and around £90 on contract renewals each year and around £90 on check out fees.
Will rents increase?
They may increase. The fees being charged by agents may be passed on to Landlords or added into the rent. There is already a shortage of rental properties and renting is more expensive than buying a similar property with a mortgage.
Why is the Government doing it?
They are looking to reduce the cost of renting, pass tenant costs on to Landlords and make the letting industry more competitive.
What does it mean for Landlords?
Letting agents may pass these fees onto their landlords as increased set up fees or increases in their monthly management fees.
Landlords will need to consider the following:
- Just accept the price increase.
- Look for a more competitive letting agent.
- Increase their rent to absorb this increased cost.
What does it mean for letting agents?
The average letting agent is expected to lose around £50,000 per year. They will need to review their business model and consider the following:
- Increasing their fees to landlords.
- Cutting back on staff.
- Advising their landlords to increase rent to cover the losses.
Thinking about buying your first home? Read guide to first time buyer mortgages.