How To Keep Your Rental Fees At A Minimum?

The government continues to move forward with a planned ban on fees charged by letting agents and landlords to their tenants. While this is yet to come into force there is no doubt it is coming.

Unexpected letting fees and high deposits can cause a significant affordability problem for tenants and are often not clearly explained – leaving many residents unaware of the true costs of renting a property.

Introduced into parliament 2 May 2018 the tenant fees bill will bring an end to costly letting fees and save tenants around £240 million a year, according to government figures. The Bill will also give tenants greater assurances that the deposit they pay at the start of the tenancy cannot exceed 6 weeks’ rent.With the average tenant fee being £200 and even as high as £500 this a positive step for UK tenants and will help moving into a new property much easier.

Local authorities will have responsibility for enforcing the ban in their areas. In order for councils to enforce the ban, it is vital that the Government provides sufficient resources and funding. This includes up-front funding to support activity on this issue, and a national, Government-led information campaign to make tenants and landlords aware of the new rules as we need to educate the estate and letting agents in the UK as what we cannot forget they play an important role in making sure tenants are treated fairly by landlords and ensure the properties they are renting meet all the required standards.

There is currently a real different of opinion on what’s going to happen.

Housing Secretary James Brokenshire says: This government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs.

David Cox, chief executive at ARLA Propertymark, the professional body for letting agents, says: We do not believe the bill will achieve its aims as our own research last year demonstrated that tenants will end up worse off and banning fees will not result in a more affordable private rented sector.

As a result of the bill, lettings agents are likely to charge landlords for services such as credit and reference check and administration. But ARLA has warned that landlords were likely to simply pass on any extra costs that they suffer to tenants, which could add £103 a year to tenants' bills. It also has suggested that service levels to tenants would likely drop too. 

We will have to wait and see but in general we think it’s a positive step.

One of the main costs involved in the current administration fees is to pre-qualify the incoming tenants this is a critical check the letting agents conduct as they want to make sure the tenant has the means to pay the rent on a monthly basis by doing affordability and employer checks but also looking at your credit history and property history also informs that decision.

With the tenant fee ban pending, many prop tech companies are looking for solutions to streamline the process and tenant’s passports will become very popular, this is where tenants can pre-qualify themselves for a small fee and authorise agents to access the information.

Let’s Bid Property have just announced a partnership with experian where they will offer all tenants free pre-qualification and as they are partnered with UK letting and estate agents they will be bale to get pre-qualified and then make a bid on their new rental Home.