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Proposed agency fee ban – Which side do you stand?

The Chancellor’s Autumn Statement released last year, proposed to ban agency fee charges to tenants. This has caused a catalyst of discussions to explode through various social media sites – will the fees be re-cooped in some way? How will this be done? Will Landlords fees rise to cover these costs? Will the tenants pay extra rent?

UKALA have voiced their concerns with regards to the ban, arguing that affordability in the private-rented sector cannot be addressed by preventing agents from charging for legitimate business services, and that the costs will eventually be passed to tenants in the long-term.

According to a recent survey by UKALA, if Landlords see a rise in their premiums due to the ban, then 71% who currently use a letting agent will continue to do so. As the research shows, 8 out of 10 Landlords (79%) do think that their fees will increase. It also shows the following;

– 40% of landlords said they would increase rents to cover the cost
– 22% said they would look to shop around for a better deal
– 13% would attempt to negotiate or refuse to pay
– 9% would pay the additional fees
– 9% would leave their agent
– 7% were unsure

These findings do contradict recent research carried out by UKALA, showing that almost half of Landlords (47%) would actually forego their letting agents’ services if their profits fall due to the Landlord taxation changes coming into effect from April 2017.

The National Landlords Association (NLA), along with UKALA carried out both sets of research in order to gain a better understanding on the professional lettings sector of any impacts of recent government policy decisions.

We would like to make our newsletter more interactive, and welcome any comments you may have or may wish to raise. If you would like to comment on this article, please email lettings@mtmproperty.co.uk  and depending on the response received, we can publish comments in next month’s newsletter.

 

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