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 | 0207 355 0200

Sources: ARLA, CBRE, – The Queens Speech

Related posts

Winkworth Exclusive Territories - what you need to know

'Exclusive territory' is often a misunderstood term. Many franchisors in the estate agency sector offer or grant an exclusive licence for just a town that an office is in, whilst the surrounding villages are excluded. To obtain further areas of exclusivity, these franchisors require the franchisee to purchase additional licences.

Read post

March 16, 2018

Winkworth Canterbury - under new management

Read post

March 09, 2018

Winkworth celebrates its female franchisees this International Women's Day

With the annual International Women's Day celebrations taking place on Thursday 8th March, in a year that has been dubbed 'the Year of the Woman' and a year that celebrates 100 years since women first won the right to vote, national estate agency franchise Winkworth is celebrating the achievements of its female franchisees and senior management.

Read post

March 07, 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?