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Tenant perspective: Has the fee ban been helpful to tenants?

Posted 12/12/2019 by Reeds Rains
Categories: Landlords
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The ban on charging tenants fees for administering their let came into force for new tenancies in England on 1st June this year. Two months later, the BBC reported that the main effect on tenants seemed to have been confusion!

Citizens Advice had told them that enquiries about tenant fees had risen by 54%, something that was echoed by the Property Redress Scheme, which estimated enquiries from tenants had doubled. Meanwhile, The Property Ombudsman received 68 calls in the first month, mainly from renters unsure as to whether the new law applied to existing tenancies.

In terms of the financial effect, while some letting agents are reporting that landlords have simply raised rents to cover their increased costs, Shelter argues that the Government’s own figures show that’s not true.

Looking at Scotland, where charging tenants any fees has been illegal since November 2012, it’s been difficult to see a demonstrable effect on rent prices, which continued to be influenced simply by supply and demand.

However, Mike Campbell, Director of the Council of Letting Agents in Scotland, points out that there is a difference between the situation in the two countries: “Most agents in Scotland charged about £50 in tenant fees per tenancy and those fees accounted for about 6% to 8% of their income. In contrast, average fees in England tend to be several hundred pounds and account for 12-15% of agent income.” As such, there is a greater pressure on agents and landlords to look to recoup the loss.

As professional agents, we are always looking to secure the best possible market rent for our landlords, while ensuring the price is not so high that tenants are deterred from viewing a property. We are careful about the level at which we pitch rents so, just because a landlord wants an increase, that doesn’t mean it’s something we are able to do.

If you have any questions about the Tenant Fee Ban, just call into your local Reeds Rains branch and one of the team will be happy to help.

Alternatively, book a FREE lettings review

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