You are here: Home - News -

Housing minister: “Rents may rise after letting fees ban”

by:
  • 07/09/2017
  • 0
Housing minister: “Rents may rise after letting fees ban”
Housing minister Alok Sharma has admitted rents may rise as a result of the proposed ban on letting agent fees.

The proposal – to ban agents from charging fees to tenants – was first made by Chancellor Philip Hammond in the Autumn Statement last November, with the draft Tenants’ Fees Bill announced earlier in the summer.

The move was met with criticism from some corners of the market with Richard Lambert, chief executive officer at the National Landlords Association, claiming: “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.”

Yesterday a House of Commons debate on the subject was held with Sharma (pictured) admitting this could be the case.

He said: “While there may be increases in rents, they would be significantly smaller than the fees tenants are currently being charged. We will keep the impact on rents under review.”

Ying Tan, managing director of the Buy to Let Business, said: “In a strange way it’s good to hear Alok Sharma admit landlords may be forced to raise rents when the letting fee ban comes into play, as agents recoup their losses by hiking landlord fees. It shows that for the first time in a long while the government is starting to understand the market. The problem is this acknowledgement is too late. As I and many others have said all along, the industry should be consulted long before such proposals are announced.

“Unfair lettings fees should certainly be scrapped – and unscrupulous agents stopped – but an outright ban with no proposed alternative is likely to do more harm than good.”

During the debate it was revealed holding deposits will be exempt from the ban in order to deter tenants from registering in multiple or unsuitable properties.

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Bridging

Keep up-to-date with all the breaking bridging and short-term lending news and analysis, from regulatory changes to product innovation and inside market knowledge. Take a look at our broker and lender case studies showing short-term finance in practice.

Commercial

Find all the news, opinion and analysis for property finance brokers specialising in commercial and semi-commercial mortgages, alternative and development finance for commercial investments in residential projects.

Second charge

Stay up-to-date with the latest news, analysis and opinion on the secured loan market as it evolves into a mainstream finance option following European regulation on 21 March 2016.

Complex buy-to-let

Whether it’s a complicated asset or a complex customer, you’ll find out all the breaking buy-to-let news in this section. From limited companies to portfolio landlords, student lets to a House in Multiple Occupation, we’ve got all bases covered with our up-to-the-minute news, analysis and opinion.

Mortgage Solutions

Find all the breaking news, analysis and industry comment on Specialist Lending Solutions' sister site, Mortgage Solutions
Read previous post:
graduates in cap and gowns
London graduates spend half of salary on rent

Graduates in London are spending over 45% of their take-home pay on rental payments, the latest Landbay Rental Index has...

Close