As part of the Autumn Statement last week Chancellor Philip Hammond revealed plans to ban letting agents in England from charging administration fees to tenants when they sign a new tenancy agreement. Currently tenants are charged fees for a number of administrative tasks such as references and immigration and credit checks. This often proves to be expensive, with the latest English Housing Survey suggesting that the average value of such fees in 2014-5 was over £200.
Under the new plans these costs would instead be shifted to landlords, who the Chancellor believes are in a better position to shop around to find the cheapest letting agent. However, it has been suggested by some housing associations that this will force landlords to increase rents in order to cover these new costs. This could actually lead to tenants paying more in rent over time than the cost of the letting agents' fees.
Other housing associations and charities such as Shelter have looked to Scotland as an example, where letting agents' fees were banned in 2012. Research undertaken in Scotland suggests that very few landlords have actually increased rents following the ban of the fees, choosing instead to absorb the costs themselves.
The Chancellor emphasised that the ban would take place "as soon as possible" but no specific timescale has been set out for the changes to take place and the Treasury has simply said that the government will consult on the plans "in due course". In the meantime, landlords can prepare for any changes by considering the deals which are offered from letting agents and deciding which of these deals will best suit their needs when the plans are implemented.