LETTING & ESTATE AGENT

Tenant fee ban. How will it affect us?

Tenant fee ban. How will it affect us?

There has not been much commentary about the effect of the tenant fee ban that is currently going through parliament. Estimates have put the movement of tenants as high as 20% in the months after the law is introduced. This means that tenants who are on periodics can simply move to another property without any costs and will probably forgo their deposits and just hand keys over enjoying their new freedom.

Landlords are expected to foot the bill for any reductions in agent fee incomes. The government is trying to stop the practice of agents taking fees from both the landlord and tenant but the real effect is to punish both the agents and the landlords. We believe those agents who structure their businesses properly and use economies of scale to reduce overheads will succeed in winning more landlord business with a small increase in fees around 1%-2% is what we expect the maximum increase that will be tolerated by landlords.

We are trying to remove all our periodics over the forthcoming months ensuring all existing tenants are referenced through our new legal protection service to protect our landlords from legal costs and making all tenancy agreements run for a twelve month period to avoid this period of mass destabilisation.