Simon Westwell our Lettings Director is warning tenants and landlords to be aware of the new lettings fee ban which comes into force from the 1stJune “It seems that many lettings and management companies didn’t think this day would actually come and made no plans to make sure they are compliant with the new law, they’ve buried their heads in the sand a bit”
Under the new legislation, the only fees renters can be charged are: the rent, a refundable security deposit, a refundable holding deposit and what will be known as ‘default fees’.
Simon added, “We decided a few months ago that it was wise to make strategic plans for the ban coming into place and to phase adjustments in so it wasn’t such a massive shock for landlords. We have successfully done this with little disruption and so we’re now compliant ahead of the deadline.
“Previously tenants were charged a fee for the work required in order to set up their tenancy agreement including credit checks, referencing and inventories. These checks are still required so agents have had to increase their fees to landlords as historically they would have been offset by the fees from the tenants. Increasing agent’s fees to landlords in this way, enables agents to offer the same service level as currently supplied.”
In a recent survey conducted by property maintenance software company Fixflo, 70% of those polled said that they plan to keep their property portfolios and the majority of those landlords, 63%, said they do, and will continue to use agents for their properties, citing rent collection and legislative compliance handling as being the most important factors.It is believed that whilst some landlords may decide to ‘go it alone’ we are warning that becoming a DIY landlord will require investors to educate themselves about the rental market and the increasing laws and legislation they need to comply with. Failure to comply with strict regulations can result in hefty fines and appointing an experienced agent pays dividends in the long run.
Simon said: “It has undoubtedly been an uncertain time for landlords with recent tax relief changes and now the tenant fee ban. Our advice is to stay calm and ensure that you always use a reputable letting agent that is a member of the Association of Residential Letting Agents (ARLA). This means that the agent is fully regulated and has to maintain the highest professional and legal standards and will ensure you are given the correct advice and up to date with regulations.”