In January 2019 official data was released showing that average rents rose by just 1% in 2018, a fraction of the average 2.5% rent increases seen in the pre-Brexit days of 2015 and 2016. The House of Lords also made an announcement which approved the Government’s plan to limit the charges that either private Landlords or Letting Agents can levy on tenants in England. More than two years after the tenant fees bill was proposed by the Chancellor, it is finally due to become law on 1st June 2019.
Landlords and their Agents will not be allowed to charge tenants for Credit Checks, References or Inventories that they carry out. The new law is specific, capping deposits and banning many of the most common charges, some reasonable charges will still be allowed, such as penalties for tenants if they pay their rent late or lose their keys.
Many out of the Industry feel that Tenant fees are a symptom of a system which is tilted in favour of property owners and their Agents, rather than Tenants. Take credit checks for example. Landlords want to know about a would-be tenant’s credit history so they can decide whether they are likely to pay their rent on time. That is fair enough, but what isn’t fair is the Agents who over the years have charged the tenants hundreds of pounds for running an online credit check that may cost them just a few pounds.
Once the Bill becomes law, estate agents will face a tough choice – they will either have to take the hit themselves and lose an essential revenue stream or find a way of replacing the lost income, possibly by charging Landlords more for the work they do. Neither is a particularly attractive proposition.
At ‘Iles & Jenkin’ we have always practiced good ethics and kept our Tenant fees as reasonable as possible, and far lower than the average Agent. Our Referencing Fees have always been £50 per adult, and our Admin fees are between £80 and £120 per property, depending on the size. And that’s it. Nothing else, no other ‘hidden’ charges, just a clear and transparent fee structure intended to simply cover our costs and our time.
So, good riddance to the egregious charges we say – it’s just a shame that it has taken so long for the ban to come into force!