An alternative to the letting fee ban has been proposed to the Government. By a selection of independent letting agents. Instead of an outright ban, which the agents say could drive sectors underground, they suggest a cap on tenant fees. This would be equivalent to a week’s worth of rent. Recommended to apply to each new tenancy transaction, a mandatory levy is also being called for.

The firms propose that this levy would apply to agents on a nationwide basis. And would cost up to £25 for each transaction. The independent agents recommending the changes predict that this would raise between £30 million and £50 million. This would be on a yearly basis, and all of which would go into a central fund. This would be collected by tenancy deposit schemes who would also administer the funds.

How would the money be spent?

It would go towards numerous causes including health and social care agencies, and homeless charities. Money would also be spent on the infrastructure to both support and improve the regulations of the lettings market.

As well as improving the existing market, the agents believe that a cap (instead of a ban) would prevent some market sectors from going underground. They highlight that the number of rogue agents and unprofessional landlords could increase. Causing a “wild-west” crisis, which would in turn would negatively impact tenants.

In addition to the adverse effects on tenants, the group also mentions the potential impact on agents. They stated a ban could result in “wide-scale” redundancies. Particularly given the large cutbacks which agents may need to make.

Full details on the alternative to the letting fee ban can be found here.

Fletcher Longstaff are always on hand to provide legal services & advice. Please do not hesitate to contact us if you require some guidance on this matter.