Following the recent announcement from Philip Hammond in the Autumn Statement that tenant fees are to be banned, experts have been discussing how this may negatively affect the lettings industry with tenants bearing the brunt through increased rents.
A ban for 2018 is more likely
But with breaking news yesterday from the Department for Communities and Local Government, it was revealed that the tenant fee ban wouldn’t come in until at least 2018. Rachel Williamson, from the DCLG, countered Hammond’s claim that the fee ban would be introduced ‘as soon as possible’ by stating that they will work with the lettings industry on forming a consultation and that primary legislation is needed.
She explained that parliament is already heavily pressured with Brexit and that the fees ban cannot happen automatically. She stated, “It is not in anyone’s interest to see rents rising. The Government is coming from position of making life easier for tenants.”
Upad survey reveals 40% of landlords are considering a rent increase
With Upad finding that almost 40% of landlords are planning to increase rents in wake of the tax changes from 2017 and the fees ban, it’s clear that the implementation of the fees ban needs to be well thought out to avoid affecting the projected 2.6 million tenants who’s rents could be increased.
James Davis, CEO and Founder of Upad, commented, “I’m not surprised by this delay. It’s such a shame that 8 million tenants in the UK will continue to be ripped off by letting agents that charge astronomical charges to set up a tenancy - to the tune of £100’s for at least another year. These unfair fees are heavily disproportionate to the work done (if any in some cases!). The Chancellor needs to make it happen.”
Many landlords are assessing their finances to cope with the barrage of changes aimed at curbing the buy-to-let market, which also included the increased Stamp Duty Tax this year. There are ways to cut costs, such as self managing and using an online agent, like Upad, to ensure profit is minimally impacted. Switching from a high street agent can save you £1000’s, find out exactly how much you can save with our online calculator.