THE IMPACT OF THE TENANT FEE BAN
We learnt a few things from the tenant fee ban announcement but there is still a lot of ambiguity that will not become clear until after the end of March.
So the date has been set as the 1st of June. This means that all contracts SIGNED AFTER this date will not be able to charge tenants retrospective administration fees. This goes for landlords and agents. Any contracts signed before this date even if the tenancy starts later are entitled to charge fees.
The only fees detailed as chargeable to tenants after 1st June are:
- Loss of keys (reasonable cost but no clarity on what is reasonable)
- Rent Arrears (Only chargeable after 14 days in arrears)
- Change of sharer or surrender of tenancy (No clarity yet on charge but suggestion could be up to remainder of tenancy charge)
- Capped at a maximum of 5 weeks if annual rent is under £50,000, 6 weeks if over £50,000
Fine for Agents/ Landlords
- £5000 per Breach of fee ban
IMPACT TO TENANT:
Less moving costs making up front moving costs more affordable.
Insurance backed deposits likely to give further up front savings.
Chance of an increase in rent making monthly costs more difficult.
Expectation of a quicker turnover of tenants, more likely to move due to no up-front charge and financial viability.
IMPACT TO LANDLORD
Increased charges for Landlord from agent.
Lack of agents willing to help with only the “tenant find service”.
More potential void periods with tenants moving more often.
Deficit of works to be undertaken after deposit disputes.
May turn to insurance backed deposits to cover themselves.
Potential increase in rent
IMPACT TO AGENT
Reduced income up front but still have to provide same service to landlords and tenants.
More people wanting to move, therefore increase in viewings and time.
Tenant find service may become financially unviable.
Will have to be more detailed in what they are charging Landlords for.
Potential increase in sales for Investors who are struggling to make money with tax changes and increase in fees.
Less competition as some lettings agents will go bust.
If you are concerned or have any questions regarding the impending changes to the rental market, please feel free to contact me via: Neil@nexaproperties.com