'Letting agent fee ban will increase rent costs'
Published by Max Salsbury for 24dash.com in Housing and also in Central Government, Regulation
Westminster negotiates lower private rents on former council flats
Banning fees charged to tenants by letting agents will push rent costs up, the Residential Landlords Association has claimed.
Labour MPs will today propose an amendment to the Consumers Rights Bill, calling for an end to the charges.
However, the RLA has warned that such a move will lead to an increase in costs for tenants.
According to the RLA, English letting agents share the costs of providing their services including, marketing, contract preparation and credit checking between landlords and tenants - this if all fees are loaded onto the landlord, they will have to pass the extra costs on to the tenant through the rent.
The RLA argues that landlords would want to recoup the extra costs in the first six months of a tenancy, thus is a danger that they would set a higher rent level which would then continue for the whole of the contract.
The RLA is calling for letting agents to provide tenants and landlords with a breakdown of what is covered by the fees they charge.
RLA chairman Alan Ward said: “There is a very real danger that political posturing is getting in the way of sound, evidence based policy.
“The reality is that today’s amendment would, if implemented, only increase costs for tenants – the direct opposite to what Labour is calling for. Tenants will continue to pay the additional charges throughout the length of tenancy.
“The only way to reduce the cost of living for tenants is to boost the supply of homes to rent and yet all Labour’s policies will have the opposite effect by discouraging landlords from investing.”