Government plans to ban letting agent fees paid by tenants are unlikely to make renting cheaper, as new research reveals the prospect of a ban is already being felt by the market.
Among letting agents that responded to a survey by the Residential Landlords Association (RLA), over half, 57%, planned to cope with the proposed tenant fee ban by increasing the fees landlords pay.
This raises the prospect of the extra costs being passed on to tenants in higher rents over the long-term.
The warning has been echoed by the Office for Budget Responsibility which has noted: “it is possible that a ban on fees would be passed through to higher private rents.
“If this was the case, it could affect our housing benefit spending forecast.”
The survey finds also one in five landlords are less likely to use a letting agent as a result of the fee ban, with the RLA offering a ‘wealth’ of material, support and advice for those considering such a move.
Rather than a fee ban, the RLA is calling on ministers to use the powers they already have to force agents to display more prominently the fees they charge, and specify them in greater detail.
This would make it much easier for tenants to compare fees charged by one agent compared to another.
RLA policy director, David Smith, said: “Tenants are being offered false hope that banning the fees they pay will make renting cheaper.
“Rather than making changes which the Office for Budget Responsibility has warned could push up rents, ministers could take immediate action to help tenants shop around for the best deals they can find.
“Many landlords get the education they need to manage their properties effectively themselves.
“However, not all landlords have the desire or time to do so.
“Whilst letting agents are important in supporting landlords in such circumstances, the RLA can provide all landlords with the material, support and advice they need to ensure they are renting property in line with all their legal obligations.”