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

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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Landlady14
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

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Mark
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

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Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

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James Powell
James Powell 27 Feb 2017

This is a very good news.

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DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

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Matt
Matt 20 Feb 2017

Is this fake news?

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Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

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CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

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