An alternative to the blanket ban on fees has been proposed to the Government by a selection of independent letting agents.
Instead of an outright ban, which the agents say could drive sectors underground, they suggest a cap on tenant fees, equivalent to a week’s worth of rent.
Recommended to apply to each new tenancy transaction, a mandatory levy is also being called for.
The firms propose that this levy would apply to agents on a nationwide basis, and would cost up to £25 for each transaction.
The independent agents recommending the changes predict that this would raise between £30 million and £50 million on a yearly basis – all of which would go into a central fund. This would be collected by tenancy deposit schemes who would also administer the funds.
It would go towards numerous causes including health and social care agencies, homeless charities, and new infrastructure to support and improve regulation of the lettings market.
As well as improving the existing market, the agents believe that a cap instead of a ban would prevent some market sectors from going underground. They highlight that the number of rogue agents and unprofessional landlords could increase, causing a “wild-west” crisis. In turn, this would negatively impact tenants.
In addition to the adverse effects on tenants, the group also mentions the potential impact on agents. A ban, they stated, could result in “wide-scale” redundancies, given the large cutbacks which agents may need to make.
