Reasons To CAP Tenant Fees - Not Ban Them!

You will probably be aware that the last Government stated they’ll ban tenant fees, because it argued landlords should pick up all the costs associated with letting a property, on top of the fees they already pay.  This is as a result of lobby groups such as Shelter and Citizens Advice Bureau making a case of “unfair fees” based on the small number of tenants with whom they deal. We totally disagree with this ban, as we believe landlords should not cover the costs tenants incur when applying for a property, as it is the tenants who ultimately benefit by having a roof over their heads.  The fees we currently charge at Belvoir Shrewsbury are £228.00 for one applicant and £36 for any additional adult tenant – these fees cover the cost of vetting applicants, negotiating the tenancy agreement and a share of the inventory, not to mention all our time coordinating the application and move in.  This is well below the national average.  An outright ban is unfair on everyone, including both landlords and tenants.  Belvoir Shrewsbury is doing everything in its power to replace the “ban” with a “cap” and we are looking for your support! 

 Consultation Document

Since its announcement in last year’s Autumn Statement the Government have produced a Consultation Document for consideration and comment.  We’ve scrutinized this document and believe it to be skewed and biased in rationale towards the objective of the ban rather than a balanced argument.  It can be read here:

 Banning Letting Agent Fees Paid by Tenants – Consultation Paper

Main Concerns With Proposed Ban:

  • The ban is based on misleading and inaccurate data, much of which has been produced by a single lobby group – Shelter.
  • The “evidence” is London centric, where some unscrupulous agents charge highly inflated tenant fees.
  • The Government does not understand fully the work that is completed on behalf of a tenant.

Belvoir Shrewsbury At The Forefront

Belvoir Shrewsbury have been at the forefront of a campaign to explain to the government the reasons why a tenant application fee ban would be, at best, counter-productive and at worst result in yet another detrimental effect on the private rental sector as well as having harmful tax implications for the government:

 A small delegation of Belvoir Shrewsbury staff went to see Gavin Barwell, Minister for Housing, in Birmingham recently.  We explained the adverse effect of a tenant fee ban directly to him from the point of view of agents, landlords and tenants. 

What Belvoir Shrewsbury Have Been Doing

We have written to Shrewsbury and Atcham Member of Parliament Daniel Kawczynski who has assured us he is acting in the best interests of the sector and has represented our case to the Department of Communities and Local Government (DCLG). 

Belvoir Shrewsbury MD, Paul Wallace-Tarry, recently represented this office in the DCLG at the Home Office in London to give his view that an out-and-out ban on tenant fees is misguided and potentially damaging to those who the Government are in fact trying to protect – the tenants.

Belvoir Central Office is also part of the Fair Fee Forum, a consortium of interested parties including the top end agents and industry professional organisations, who are advising DCLG on their Consultation Paper. 

Wrong To Bow Down to Single-Issue Lobby Groups

We think the last government was wrong to bow down to one or two lobby groups who represent no more than 5% of the market, in fact the 5% the government needs to directly look after.  If the ban takes effect it will force us to adjust our fee structures and those costs will be passed on to the tenants in some way.  This side of our business requires sensible regulation, in short, the consultation process should return a verdict of ‘capping tenant fees, rather than banning fees’, which would hit the rogue agents, not the bona-fide agents who work hard to look after and protect their tenants.

Your Views

We would like to draw your attention to the Consultation Document, please click on the link HERE (also copied above) and we ask you to read and give your views, using the questionnaire at the rear of the document.  Thank you.