News: Fees Ban given green light by 'independent assessment' body

Mon, 04 Feb 19

The government has published an independent assessment of its Tenants Fees Bill proposal - the ban on fees levied by letting agents on tenants in England and Wales. 

The independent assessment is a procedural requirement of this kind of law and, perhaps unsurprisingly, this independent assessment says that the measure is ‘fit for purpose.’

The assessment has been prepared by the Regulatory Policy Committee, an independent body sponsored by the Department for Business, Energy and Industrial Strategy which assesses the impact on business of new regulatory and deregulatory proposals.

Broadly, the assessment examines the government’s case for the ban on fees. This revolves around a number of factors but two in particular are central.

The first is that the government claims agents’ fees to tenants “are typically well in excess of fees charged for similar services by landlords, let alone the costs of the services provided.” 

The second is that there is evidence, despite existing legislation requiring agencies to display fees clearly, that “tenants find it difficult to assess the full cost of renting a property at the point of decision” leading the government to conclude that “agencies are in some cases making excessive profits.”

The independent assessment backs up the government’s case on the fees ban but calls for improvements on the rationale it puts forward for a cap on deposits. 

“In particular, its assumptions around homelessness and affordability are not clearly evidenced and it would be helpful if the views of landlords and others could be presented alongside those of tenants” says the independent assessment. 

The assessment also draws out one intriguing possible by-product of the fees ban when it says: “For example, reducing the cost of changing tenancies might reasonably be expected to reduce the length of the average tenancy and to place increased competitive pressure on landlords, thereby reducing rents.”

Back to: News Index