Pennycuick Collins warns abolition of lettings fees will add to woes of generation rent
April 19th 2017
As we make our debut at the Landlord Investment Show taking place today at Villa Park in Birmingham, we are acutely aware that the Government’s plans to ban lettings fees are likely to result in a hike in rent, at a time when affordability and availability are causing considerable anxiety for Generation Rent in Birmingham. With renting privately now becoming the norm for the younger generation, the proposals announced in the Chancellor’s Autumn Statement in November 2016 are designed to reduce upfront costs for private tenants.
Commenting on the proposals, Lucy Roberts, head of Pennycuick Collins’ lettings services said: “The Private Rental Sector (PRS) has changed dramatically in recent years and the proposals to abolish letting fees won’t address the fundamental problems facing the industry. Letting agents play a vital role in ensuring properties offered for rent are fit for purpose and meet the legislative health and safety requirements set out by professional bodies. The fee enables firms like mine to protect the interests of both tenant and landlord. For landlords, we offer a referencing and contractual service providing assurances about the tenant’s suitability including ability to pay the rent and meet conditions designed to protect the upkeep of the space. Equally, tenants benefit from protection against rogue landlords by having robust contractual agreements in place which ensure the living space is safe and fit for purpose. My fear is that standards will slip as landlords decide to cut corners on the services provided by letting agencies. I also anticipate that landlords will seek to pass the fees on through increased rents, reducing transparency of costs for tenants. The measures announced by the Government will hit private landlords hard at a time when rental returns have been significantly eroded, especially following the reduction in tax relief allowed on mortgage interest payments.”
She concluded: These measures are felt particularly hard in the West Midlands and I feel are a knee-jerk reaction to the housing situation in London which is more acute than here in the Birmingham. I will be interested to hear the views of representatives from the PRS at today’s exhibition.”