ARLA Propertymark and the Residential Landlords Association have written to the Welsh Government seeking a meeting to discuss a possible ban on letting agents’ fees levied on tenants.
The issue of banning letting agent’s fees in Wales was raised again by Assembly Members - the term for Welsh Government MPs - earlier this month when the Welsh Communities Secretary, Carl Sargeant, said: “I’m very concerned that fees charged by letting agents are placing a disproportionate burden on tenants. I hope to be able to announce shortly how we as a government propose to respond.”
In the letter to Sargeant, ARLA Propertymark and the RLA highlighted the significant number of common concerns from both letting agents and landlords – most notably a reduction in the quality of service provided if money is taken away from the sector.
This includes the new legislation brought in by the Welsh Government meaning that landlords and letting agents managing property in Wales must be registered and licensed with Rent Smart Wales.
Furthermore, the organisations say that under Rent Smart Wales if a letting agent fails to comply with the conditions of their licence, which includes clearly advertising their fees to both tenants and landlords, they would put themselves at risk of losing their licence.
Without a licence, they would be unable to continue operating as a letting agent in Wales.
ARLA Propertymark says it will continue to work across the sector to ensure that politicians listen to the industry and follow the evidence.
“We hope that Mr Sargeant will engage with us to understand fully the importance of any future decision around banning fees and the effect this would have on letting agents, landlords and tenants in Wales” ARLA said in a statement.
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This issue has been driven by Shelter.
My opinion is that to save an average £233 fee the evidence shows that in Scotland it has cost tenants an extra £149 rent per month in rent so this policy is not in anyone's best interest.
What I have noticed is that Shelter are using different language regarding rent increases in Scotland.
When talking about increases in rents in Scotland generally they say:
Adam Lang, head of policy at Shelter Scotland, said rents had soared in recent years while wages had remained stagnant.
“So a great many people see a bigger chunk of their income going to pay for housing costs, which makes it really hard to save".
“At the heart of the problem is the fact that demand for houses far outstrips supply which is why we urgently need a step-change in the provision of truly affordable housing.
“We need at least 12,000 affordable homes built across Scotland each year for the current parliament just to meet demand.
“Next year will see the introduction of a new tenancy regime in Scotland which will make it harder for landlords to evict tenants without good reason and will also limit rent increases to once a year.
“Tenants will also be able to appeal to a rent officer if they feel the increase is unfair.
http://www.edinburghnews.scotsman.com/news/business/rents-in-edinburgh-set-to-soar-20-in-five-years-1-4390128
However when asked if rents in Scotland have risen due to the ban on letting agent fees they say:
Many industry insiders had predicted that abolishing fees would impact on rents for tenants, but our research show that this hasn’t been the case. The evidence showed that landlords in Scotland were no more likely to have increased rents since 2012 than landlords elsewhere in the UK. It found that where rents had risen more in Scotland than in other comparable parts of the UK in 2013, it was explained by economic factors and not related to the clarification of the law on letting fees.
http://blog.scotland.shelter.org.uk/2016/11/23/scotlands-experience-of-abolishing-letting-agent-fees/
So if wages have remained flat (as per evening news article) then what are the economic factors that Shelter are referring to in their blog?
Simple answer increased anti landlord/letting agent legislation in Scotland is feeding through into higher rents.
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