Government's bold claim - 'Fees Ban won't hurt many agents'

The government has made the controversial claim that the ban on the levying of fees on tenants will not produce “significant adverse effects” on letting agents. 

At the end of a new 55-page document outlining progress on the Tenant Fees Bill through Parliament, published between Christmas and New Year, the government says it will monitor the effects of the measure when it becomes law - this is expected sometime in 2019. 

“Given the number of recent, and planned, policy changes in the private rented sector, we will monitor trends across the industry as a whole, utilising a range of data sources. These include VOA rental prices data, the ONS rental price index, and data from the English Housing Survey” explains the government. 

“The Private Landlord Survey 2018 is currently underway, with findings due to be reported at the end of Summer 2018. This will provide a useful baseline. However, it will not be possible to detect with any level of robustness any change in rental level or landlord behaviour that are attributable solely to the Tenant Fees Bill. For example, any changes in rental price growth could be due to a wide range of factors in the economy” it continues.

Then, controversially, it adds: “We plan to monitor the implications of the Tenant Fees Bill for any adverse impacts through continued engagement with key stakeholder groups representing landlords, agents and tenants as well as wider intelligence from agencies such as the Lead Enforcement Authority and trading standards who will enforce the requirements of the Bill. 

“We expect minimal impact on landlords, given they charge much lower fees as evidenced in responses to the consultation than letting agents. Even with higher levels of pass through, the cost implications on individual landlords are likely to be small. For letting agents, as the ban on letting fees targets profits that would not be earned in an effective and competitive market, we do not anticipate significant adverse effects on letting agents.” 

Earlier in this new document - repeating some of the sentiments included in the impact assessment off the fee ban published earlier this year - the government states: ”The Government’s position is that landlords will cover the costs of contracting an agent and any on-going management that they choose to procure, this will, it is argued ‘sharpen and increase letting agents’ incentives to compete for landlords’ business resulting in a more transparent market with lower overall fees and a higher quality of service.’ It is acknowledged that the ban on fees may have a negative impact on agents that are “unable to adapt to the market.”

The government then repeats another controversial claim - that the full cost of fees currently paid by tenants should not be passed to landlords. The government insists that “there is evidence that a number of agents are charging excessive fees and that some agents are double charging landlords and tenants.”

You can read the latest document in full here - it does not contain any confirmed date when the Bill will be made law, although its final major Parliamentary stage is taken in the House of Lords on January 19.