Letting fees ban on hold until at least Spring 2019 By LandlordZONE - 11th January 2018
The newly renamed “Ministry of Housing, Communities and Local Government” (MHCLG) headed by Sajid Javid has confirmed that a letting fees ban will not come into force before the Spring of next year.
In written communicate to the Select Committee hearings, currently scrutinising the draft legislation, and also to the National Approved Letting Scheme (NALS), MHCLG has said that it will be at least 15 months before any lettings fee bad can be introduced.
The draft legislation, which was introduced by Sajid Javid last November, was given a rough ride by industry representatives at the hearing Monday. It will now go proceed to a third reading in the House of Commons before moving to the Lords.
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MPs heard on Monday from the University of York’s Centre for Housing Policy and Shelter that a letting fees ban could easily lead to higher rents when the equivalent of the fees is added to tenants’ rents, spread out over the length of each tenancy. The fear was also expressed that such a ban could result in the reduction of the quality of rented accommodation, as landlords react by “tightened their purse strings”.
Isobel Thomson, CEO of NALS told The Negotiator industry journal:
“We’re pleased to see more clarity on the timetable for implementation of the ban – it’s much needed for our industry and something NALS has long called for.
“While the Bill aims to create a fairer and safer PRS for all, NALS doesn’t believe this will deliver what the government aspires to and risks doing real damage to the PRS.
“NALS urges government to use this time to fully assess the impact of the Bill. It is crucial that government look again at the proposals and consider tenant fees in a broader, coherent framework of regulation for the PRS.
However, ppeaking in response to the announcement James Davis, founder of online letting agent Upad.co.uk and himself a portfolio landlord, commented:
“Ever since the proposed ban on charging upfront fees to tenants was announced in the 2016 Autumn Statement, there’s been an air of ‘will they? won’t they?’, not to mention, the ‘when will they?’.
“Whilst today’s announcement that it’s unlikely to be implemented before the Spring of 2019 provides a certain level of clarity, the fact remains that there are still many mixed messages around this move. Indeed, some within the industry still believe it’s likely to come in to effect before the end of this year.
“Landlords, however, simply can’t afford to not be prepared for what lies ahead. In my experience, there’s a certain amount of ‘head in the sand’ mentality around the impact that this ban could have, both amongst letting agents and landlords.
“Unfortunately, many headlines focus on how rents will increase once this legislation is implemented but the reality for landlords is that this needn’t be the case. Most private landlords don’t, in fact, charge excessive upfront costs and by simply taking the time now to consider how else they can manage their costs, they’ll be assured of being prepared for the fees ban, whether that happens, this year, next year or indeed at all.”