Letting agent fees ban receives mixed reception in Jesmond
A plan to ban letting agents in England from charging fees to tenants, announced in last week’s Autumn Statement, has been welcomed by Jesmond’s student population, but opposed by its landlords.
Campaigners petitioned the government to make illegal the “unfair” fees charged by letting agents for a range of administrative services such as credit and immigration checks. In last week’s government announcement, the ban – already in place in Scotland – was announced.
Chancellor Philip Hammond has said that the ban will shift costs onto landlords, saving over four million homes hundreds of pounds each time they move home. The hope is that the ban will spark competition among landlords who, unlike tenants, have the benefit of being able to shop around for their agent.
The fees that agents are charging vary widely across the country, with big cities being hit the hardest. Tenants throughout England have been forced to bear the upfront cost of administration fees as well as potential non-refundable holding “deposits” before even moving in.
Hammond stated that the ban will be enacted “as soon as possible” and will come as a welcome relief to millions of renters across England. He went on to say “we have seen these fees spiral, often to hundreds of pounds… This is wrong. Landlords appoint letting agents, and landlords should meet their fees.”
JesmondLocal spoke to Newcastle University students Dimitris, who said “you don’t really feel like you have a choice [but to pay fees]. They show you around some houses, you find one that you like, but when it comes to signing the contract they hit you with the £150 per person administration fee.”
Dimitris understands that the letting agent has to make money, but doesn’t think they are doing enough to justify their fees.
“We paid £750 in administration fees alone,” he says, “and what did we get in return? A very rude agent that makes our lives as difficult as possible – you would have thought for that amount of money we would be getting a five-star service.”
Housing charity Shelter conducted research in 2012 and found that one in seven tenants are paying more than £500 in administration fees. Including first month’s rent, prospective tenants face an average upfront cost of more than £1,000 nationally. Critics argue that these fees far outweigh the actual administrative cost to the agent.
Landlords are worried that they may have to raise rents if letting agents pass the costs onto them. Newcastle landlord Richard told JesmondLocal: “I am worried about the effect this might have on both tenants and landlords. If letting agents are losing out they will have to pass these costs onto landlords, forcing us to potentially raise rents in order to maintain what are sometimes small profit margins.”
Campaigners are confident that rent prices will remain largely the same. Scotland banned letting agency fees in 2012 and, according to Shelter, rent increases were only “small and short-lived” despite many landlords warning of rises. Since 2012, rent increases across Scotland have stayed in line with the national average.
PricedOut have been the biggest voices in the campaign for affordable housing, and believe that it is “very likely that landlords and agents will bear most of the costs, as they have done in Scotland, which banned fees years ago”.