May 8, 2014

Tenant fees in question

UK letting agents who charge tenants a fee for securing rented accommodation may soon find themselves operating illegally, if Labour’s plans to ban tenant fees come to fruition.

The proposal is being led by Ed Miliband, who is determined to see this new legislation passed immediately, despite concerns by The Association of Residential Letting Agents.  It is envisaged that it will form part of the amendment to the Consumer Rights Bill, which will be heard in the House of Commons on Tuesday.

The full details of the plan have yet to be revealed, but it is thought that letting agents may instead have the option of passing on tenant fees to landlords.  New tenants will still be required to pay a deposit and the first month’s rent in advance.

Miliband believes that many tenants are receiving a poor deal from landlords and letting agents; also fighting for a cap on rent increases within the private sector.  He has stated that his party will fight for a fairer deal for tenants.

In response, the Association of Residential Letting Agents says if the legislation is passed, then it is likely to result in an increase in rents, as landlords and letting agents must find other ways of recouping this loss of income.

A vote will be held on Tuesday, following which the amended Consumer Rights Bill will need to be read a third time in the House of Commons, before being passed to the House of Lords if successful.

As a letting agent who charges tenant fees, how would these proposed changes affect your revenue stream?  How have you planned to recoup this financial loss, should the Bill be amended?  Let us have your thoughts.

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