Landlords to stand by agents in wake of tenant fees ban

Landlords to stand by agents in wake of tenant fees ban
This research is reassuring for agents in some ways as it shows the majority of landlords will retain their services even if they have to pay more

According to a recent survey, 71% of landlords who use a letting agent will continue to do so even if they see their premiums rise following a ban on tenant fees.


The research, from UKALA, shows that eight in ten landlords (79 per cent) think their letting agent will increase their fees as a result of the proposal to ban charges to tenants, as announced in the Chancellor’s Autumn Statement last year. However, just nine per cent of landlords say they will part ways with their agent if their premiums rise.

The ban is criticised by UKALA who argue that affordability in the private-rented sector cannot be addressed by preventing agents from charging for legitimate business services, and that the costs will eventually be passed on to tenants in the long-term.

In response to a potential increase in agent fees following a ban, the research shows:

    40% of landlords said they would increase rents to cover the cost
    22% said they would look to shop around for a better deal
    13% would attempt to negotiate or refuse to pay
      9% would pay the additional fees
      9% would leave their agent
      7% were unsure


The findings contrast with recent research from UKALA which showed that almost half of landlords (47 per cent) would forego the services of their letting agent if their profits fall following the changes to landlord taxation from April (2017).

Both sets of research were undertaken by UKALA in conjunction with the National Landlords Association (NLA), in order to better understand the impact that recent government policy decisions will have on the professional lettings sector.

Richard Price, Executive Director of UKALA, said: “UKALA agents strive to provide a premium service which represents excellent value for money, but the ban on tenant fees could leave hundreds of professional businesses with no other option than to increase fees for their landlord clients.

This research is reassuring for agents in some ways as it shows the majority of landlords will retain their services even if they have to pay more – which is testament to the essential role that agents play. However, one in ten landlords say they will turn their back on their agents if fees are passed on, and our previous research shows that a significant number will do the same if the impending tax changes take hold and erode their profits.

It leaves a tricky path ahead to navigate for agents as they’ll need to balance out the need to cover their costs in the wake of a ban on tenant fees without alienating their primary customers and source of income”.

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Latest Comments

Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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