January 2019 will turn out to be a good month for tenants, who have had two pieces of news to ‘celebrate’ since Christmas.
The first was official data 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. Tenants have unexpectedly benefitted from the recent uncertainty surrounding Brexit, which has had a cooling effect on the UK property market and in some cases, forced Landlords to rein in rent increases.
The second was the announcement from the House of Lords, almost lost amidst the excitement surrounding the defeat of Theresa May’s Brexit Plan in the House of Commons, which approved the Government’s much-delayed 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.
While it will only apply to Tenancy Agreements signed after the 1st of June, the savings for tenants may be immediate and substantial. Landlords and their Agents will not be allowed to charge tenants for any Credit Checks, References or Inventories that they carry out. The new law is detailed and specific, capping deposits and banning many of the most common charges, although 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, quite understandably, 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.
It is just this sort of ‘sharp practice’ that has drawn the attention of the powers that be and resulted in them coming down hard on all Agents. Sadly, a classic case of the few spoiling it for the many.
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. For example, 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, not fleece our Tenants - the very people we are looking to build a long term working relationship with.
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!