Letting Agents’ dismay at Autumn Statement

The Industry reacted with frustration and dismay at Chancellor Philip Hammond’s announcement that letting agents’ fees to tenants are to be banned.  ARLA commented “Is this yet another short-sighted policy from a government intent on making life difficult for lettings agents wanting to earn on honest crust? Fees are an essential part of how lettings agents earn their money, and the draconian measures are akin to banning the mechanic at your local garage from charging a diagnostic fee or your plumber from charging a call-out fee. It won’t stop rogue agents from operating and fees previously made from upfront fees will be recouped elsewhere in the chain.”

David Cox, Managing Director of ARLA further says: “Most letting agents do not profit from fees. Our research shows that the average fee charged by ARLA Licenced agents is £202 per tenant, which we think is fair, reasonable and far from exploitative for the service tenants receive. These costs enable agents to carry out various critical checks on tenants before letting a property. If fees are banned, these costs will be passed on to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents. The banning of fees will end up hurting the most, the very people the government intends on helping the most.  We have relentlessly lobbied the Government saying that banning agent fees would be bad for the industry and bad for tenants, and we are frustrated by the announcement made with no prior consultation. We will of course continue to be involved at the highest level and attempt to mitigate the proposals and protect our members’ interests.”

The move to ban tenant fees was started by 28 year old Vicky Spratt whose campaigning managed to achieve 250,000 online signatures prompting a Government debate.  Sulgrave Estates agrees with other agents in that it is almost certainly the case that the vast majority of tenants simply do not realise how much work is involved in setting up their tenancy.  The same amount of work again is required if one or more out of a group of sharers move out mid tenancy (a common occurrence in London and other big cities).  One wonders if this scenario – along with others outside of a straight letting – have been pointed out to the Chancellor who appears to have made this decision having only listened to one side of the argument.

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