What banning letting agent fees will do to the country’s rental market


Last week, the Queen’s Speech confirmed the ban on letting fees announced by the Government during last year’s Autumn Budget. A draft of how this will work is expected to be published later in the year.

Organisations across the UK’s property sector have voiced different opinions with regards to the success of the ban. Some, like housing charity Shelter, expect the ban to help make the market more fair whilst other, like the Association of Residential Letting Agents (ARLA), warned that fees might be passed on to tenants.


When looking at the history of tenant fees, fact is that median letting agent fees have increased by 60% in the five years after 2009, City AM reports.

These fees seem to be fairly detached from the costs they are meant to be covering, as online credit test are easily done online and standard lease agreements can simply be printed off.

In the end, fees are probably pushed up by letting agents as they know that renters are desperate to secure a home and won’t speak up anyway.

So how much more expensive will rents actually be?

ARLA commissioned a Capital Economics report which revealed that only 41% of landlords assume they will have to pass fee increases on to their tenants. Furthermore, the research says they will push rents up by £103 a year. Across all of Britain’s landlords, this suggests an annual increase of $42 – or 81p every week.


The average rental tenure in private rented accommodation currently lies at 18 months. So even if rents increased by £42 every year, after 18 months of renting, tenants would still be £200 better off.

Only once a tenant remain in the same property for more than six years they would start to pay more. Until then, the fee ban will make renting for them cheaper than it currently is.

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What banning letting agent fees will do to the country’s rental market

What banning letting agent fees will do to the country’s rental market


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