Telephone iconCall UsTelephone icon0333 0146 683
Our opening hours
Chevron left icon
Knowledge centre

Tenant fees ban will see rents increase £103 a year

2-minute read

Mollie Millman

10 June 2019

Facebook iconTwitter iconLinkedIn icon

The tenant fees ban will see rents increase by £103 a year on average, ARLA Propertymark have suggested.

The rent increases will occur as landlords look to recoup some of the extra costs placed on them by the fees ban.

The ban means tenants can no longer be charged for items such as carrying out an inventory or referencing.

But these services still need to be paid for. Landlords will pass these extra costs onto their tenants, according to industry expert David Cox, chief executive of ARLA Propertymark.

Costs passed onto tenants

Mr Cox said: “For renters, the ban on tenants fees will be passed onto them through increased rents rather than upfront costs.”

He suggested that those in long-term tenancies – which tend to be lower income families – will suffer the most.

Based on an average rent increase of £103, those in tenancies for 10 years or more will lose out by £755, according to the ARLA Propertymark research.

Tenant Fees Bill: what can you charge for?

The Tenant Fees Bill came into force at the beginning of this month. It means tenants will only be required to pay their rent and deposit.

While most other types of fee will be banned, landlords will still be able to charge fees to replace lost keys or for late rent.

The research found that landlords face £275 worth of additional costs due to the Tenants Fee Bill. This is based on landlords losing £0.3 billion as a result of the regulatory changes.

However, ARLA Propertymark argued that landlords would not pass the entirety of these costs onto tenants.

Instead, it said a more plausible outcome would be for landlords to pass on £103 a year on average.

Are tenants negotiating rent?

This comes as separate research by ARLA Propertymark found that the number of tenants successfully negotiating rent reductions fell from 2.9 per cent in March to 1.9 per cent in April.

It’s the lowest seen since May 2016, when it stood at the same figure.

Meanwhile, the number of tenants experiencing rent rises increased in April, with 33 per cent of lettings agents saying landlords had increased them – up from 30 per cent in March.

The figures suggest there may be room for landlords to maintain and increase rents. Tenants appear to be willing to pay the rent asked for to secure their preferred properties.

Mr Cox added: “In order to remain profitable, landlords will increase rents to cover the additional fees they are now faced with and as a result, tenants will continue to feel the burn.”

How are you coping with the tenant fees ban? Let us know in the comments below.

Get set with tailored landlord cover

Over 200,000 UK landlord policies, a 9/10 customer rating and claims handled by an award-winning team. Looking to switch or start a new policy? Run a quick landlord insurance quote today.

Start your quote

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

Find this article useful? Spread the word.

Facebook icon
Share
Twitter icon
Tweet
LinkedIn icon
Post

People also liked

3 December 20193-minute read

A guide to letting agent fees for landlords

Letting agents can be useful, but they can be expensive too. Many landlords rely on them to manage their property, collect rent, or just…

Read more

Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter

Categories

Popular articlesBusiness resources from FarillioGeneral businessGuestInsuranceLandlordLandlord resources from FarillioLegal and financeMarketingNewsOpinionProperty maintenanceTradesmanCovid-19

Address

6th Floor99 Gresham StreetLondonEC2V 7NG

Sol House29 St Katherine's StreetNorthamptonNN1 2QZ

© Copyright 2020 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.