child mortarboard gbp briefcase bath coffeecup tree twitter search crosshair fax house papers sort house-pound brochure list-items notes printer video-camera video virtual-video bath bed camera floorplan heart-empty heart-filled heart-empty-thin heart-filled-thin sofa calculator compass share clock list map-pen map-pin pencil save business-card letter phone heard people pointer cross linkedin google-plus facebook arrow-right close triangle-down my-wink my-wink-thick house-circle loading-spinner bell close-circle dog link pinterest school transport wardrobe arrow-up one two three four five six seven tick

Navigating the fees ban

During her speech on 21st June 2017, the Queen confirmed Phillip Hammond’s announcement earlier in the year that this autumn the draft Tenants Fees Bill will come into effect.

The Queen’s speech detailed the following bans:

  • A full ban on administration fees charged by agents for the initiation or renewal of tenancies:
    • - Drawing up a tenancy agreement
    • 
    • - Credit/Reference checks
    • 
    • - Ensuring a tenant has the ‘Right To Rent’
    • 
    • - Drawing up and carrying out an inventory
    • 
    • - Renewal and exit fees
  • A cap on holding deposits at no more than one week’s rent and security deposits at no more than one month’s rent.

As information on the ban on fees continues to surface, two likely scenarios are emerging:

  1. Letting agents absorb the cost
  2. The fees the tenant historically had to pay are passed on to the landlord

If letting agents absorb the cost the impact may mean closures of offices and thus loss of jobs.

If fees are passed to the landlord to pay – these are then likely to be passed on to the tenant in the increase of rent. CRBE has found however that “this partly depends on the level of costs. Given a scenario of average fees of £223, this could quite feasibly be spread out over a year, adding just £18.60 per month, or 2%, to rents.”

ARLA has some key statistics:

  • Residential lettings activity undertaken by agents turns over around £4 billion each year and adds £2 billion to the economy
  • Residential lettings activity provides 58,000 jobs, which generate employee taxes in the order of £400 million for the exchequer each year
  • Activity is spread across the country, with at least 2,000 jobs supported in every region of the United Kingdom
  • The spending of agents on suppliers supports a further 17,000 jobs while the spending of employees within the sector supports 20,000

There is a lot of information to take in with the introduction of the Tenants Fees Bill and time will tell what happens in the autumn/

To find out how you can become part of Winkworth contact our New Franchising team

James Campbell | Gina Piper
newbusiness@winkworth.com | 0207 355 0200

Sources: ARLA, CBRE, GOV.uk – The Queens Speech

Related posts

Winkworth releases H1 interim results

Last week Winkworth announced robust interim results for the six months ended 30 June 2018 with revenues and profit before taxation up, and four new offices opened.

Read post

September 18, 2018

Winkworth works with HSBC to provide franchisees’ funding

For several years now Winkworth have been working with HSBC’s dedicated Franchising Team to offer funding and advice for both the existing and new Winkworth franchisees.

Read post

September 13, 2018

What is Franchising?

Many different industries have seen an increasing number of franchised businesses over the years especially in America and the UK, but when it comes down to it – what actually is franchising?

Read post

September 13, 2018

Find your Local Office

Find your Local Office

Speak to people who, quite simply, love their patch and love what they do.

Get a Free Valuation

Get a Free Valuation

Thinking of selling or letting your property, or just interested to know what it is worth nowadays?