Property

Can letting fees just roll over and die already?

By Oliver Smith 10 March 2017
Summary

Past their expiry date.

The cost of finding, buying and selling property, from Trussle mortgages to LendInvest financing, is falling, thanks to smart new technology.

And now the rental market is next.

Reposit is just one service which tackles eye-watering deposits – typically asking for 6 weeks worth of rent, which can often cost thousands of pounds – by letting you spread your deposit payment over time.

But there are some costs that are harder to avoid, like lettings agents who charge an arm and a leg when you sign up to rent a new property.

Luckily Chancellor Philip Hammond promised to scrap these outrageous fees nearly six months ago… but today we’re still waiting for that to happen.

Fees freeze?

Lettings fees are charges you pay to have agents check your references, prepare an inventory and draft contracts, but many agents will go a step further by slapping a huge markup on these costs before passing them over to you.

In my own case when moving into a flat last year to replace an existing tenant, I was charged a whopping £300 just for the privilege of making a change to the contract, along with a huge deposit.

“Letting agents are currently able to charge unregulated fees to tenants,” said Hammond last year. “We have seen these fees spiral, often to hundreds of pounds. This is wrong. Landlords appoint letting agents and landlords should meet their fees.”

“So I can announce today that we will ban fees to tenants as soon as possible.”

But nearly six months later “as soon as possible” seems to have been code for “not soon at all”.

Renters are still being hit with these outrageous fees and Hammond made no mention of the lettings fees ban in the Budget on Wednesday.

The waiting game

What Hammond didn’t say is that the Government will first launch a consultation with the lettings industry to get their feedback on scrapping fees. That’s due to happen sometime in March or April this year, after which a bill will be taken to parliament “as soon as Parliamentary time allows”.

Many in the industry now believe lettings fees will still be around well into 2018, two years after their scrapping was announced.

In the meantime technologies like Reposit are making rental properties more accessible for those renting, Trussle is helping property buyers find cheaper mortgages and Zoopla is super-charging our property searches.

Surely it’s time regulation caught up?