The Government’s proposed ban on letting agent fees will cost tenants who stay in properties the longest hundreds of pounds, according to ARLA Propertymark (Association of Residential Letting Agents) in partnership with Capital Economics.
ARLA Propertymark has worked with Capital Economics to explore the impact a ban on letting agent fees would have on rent costs, letting agents, the private rented sector and the wider economy.
Impact on rents
Letting agent fees account for around a fifth of letting agents’ revenues, and cover the cost of vital checks required to set up a tenancy agreement. If they are banned outright when the Government publishes its consultation, agents will need to pass the costs on to landlords through higher agents’ fees.
Two in five landlords (41%) expect they will need to pass on a portion of the inflated cost to tenants, and the research finds they will most likely push rents up by £103 on average per year. If landlords were to pass on the entire uplift in agents’ fees, tenants would be hit harder, typically seeing rent increases of £275 a year.