The Chancellor has announced that letting agent fees will be scrapped for tenants in England, during the recent Autumn Statement.
Philip Hammond stated that the ban on letting agent fees will take place as soon as possible, although there will be a consultation prior to any legislation being taken to parliament. The Chancellor told the House of Commons MPs that landlords should pay the fees, as it is the landlords who opt to appoint them.
According to statistics, there are 4.3 million households in England which are in rented accommodation. Around three quarters of them have resided in their current home for less than five years, which suggests that they move home on a regular basis, paying letting agency fees each time. The fees are often announced at the last minute, meaning that some renters have to borrow the money in order to secure the tenancy.
The English Housing Survey states that the average fees amount to £386, although they can vary from £40 to £780, depending on which part of the country the property is in. London tenants face much higher fees than other parts of the country, as competition for homes is fierce.
Banning fees for tenants will introduce transparency in the rental process, although some believe that the cost of rents will increase. However, others have stated that at least renters will know exactly how much they will have to pay when they rent a property.
Buying a home also attracts fees, although these are generally announced at the start of the process. CeMAP qualified mortgage advisers are able to help borrowers find a suitable mortgage which doesn’t have large fees to pay upfront.