4th April 2018
Landlords may be forced to absorb extra fees under rules proposed by draft legislation, which would ban fees charged to tenants.
The draft tenant fees bill, which was published on 11 November 2017, would prohibit landlords and letting agents from imposing certain fees on tenants in England.
These include all charges to tenants apart from rent, security deposits of up to 6 weeks' rent, holding deposits of up to 1 week's rent, and any default fees.
Following this, the Housing, Communities and Local Government Committee has made a series of recommendations, which were published on 29 March 2018.
These include reducing the deposit cap to 5 weeks' rent and preventing landlords from keeping a full holding deposit if a tenant who provided accurate information fails a reference check.
Some organisations have raised concerns that the ban on fees could pass additional costs on to landlords, forcing them to either increase rents or absorb the cost.
Richard Lambert, chief executive of the National Landlords Association (NLA), said:
"If agents are unable to charge fees to tenants, they will have no other option than try to shift it on landlords, who will then want to pass it back to the tenant through increasing rents.
"But that does depend on tenants' ability to pay higher rents, and we expect that landlords will have to absorb some of the extra cost, at a time when the government is already taxing them more."
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