Thu 02 Feb 2017
ARLA has called for an end to up-front fees.
Instead, it is asking for the fees charged by letting agents to tenants to be spread over a six-month period.
However, ARLA managing director David Cox has conceded that the Government seems set on a full ban.
He also says that the Government is unlikely to offer a cap on fees, as that would be a climbdown from the outright ban announced in the Autumn Statement.
Meanwhile the Fair Fees Forum – launched by NALS – has re-stated its call for an review of the lettings industry, including its fees, by the Competition and Markets Authority.
New research among just over 1,000 ARLA agents reveals that 42% expect a full ban would result in reduced staff numbers, and 62% think that a full ban will cause the quality of rental properties to decline, with 61% expecting property management standards to drop.
ARLA is arguing that spreading the cost of fees, rather than banning them entirely, letting agents will be able to maintain current service levels to tenants.
The spreading of fees will also make tenancies more affordable to tenants, says ARLA, as it means they will only need to find the deposit and the first month’s rent.
ARLA also says that by keeping fees in place, landlords will also benefit and will not face higher costs at a time when they are already facing much tighter levels of regulation and dramatic rises in tax.
ARLA’s research shows that letting agents overwhelmingly expect rents to rise if a full ban comes into force.
ARLA managing director David Cox told EYE: “Despite consecutive housing ministers telling us that they don’t want to ban fees, the Government now has its heart set on doing just that.
“This is in the belief that this will improve competition and give renters greater clarity and control over what they pay.
“In order to mitigate the effects on agents’ businesses, property standards and rents that we know would happen from the research we have done with our members, we have to explore other options.
“All the signs are that the Government has no intention of capping fees and in any case it would be a climbdown on what was said at the Autumn Statement.
“Furthermore, if a cap were introduced it would more than likely be much lower than what the industry expects.
“Every agent charges in a different way so our option will allow agents to continue providing a high level of service whilst consolidating charges into a single, monthly payment – allowing tenants to see exactly what they will be expected to pay and make it easier for them to compare agencies.”
A spokesperson for the Fair Fees Forum said: “ARLA’s latest proposals were circulated to the whole Forum and feedback is now being assessed.
“Initial indications from members seem to favour continuing with the actions outlined in our last communication on January 13.
“In short, this is to prepare a paper ready to request a CMA review into fees and charges in the lettings industry and to meet again once the consultation into the fees ban is launched.”
Source: Property Industry Eye
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