Last November, the Chancellor Philip Hammond announced that all letting agents in England would be banned from charging tenants agent fees before signing for a property. At the time, the government revealed that the ban would only cover letting agents in England, but two backbench Labour AMs are now proposing that the ban be introduced in Wales too. Jenny Rathbone and Mike Hedges have called for a ban on letting agent fees in Wales, as they believe the fees are an “outrageous tax” on the poorest in society, and the Welsh Government has now revealed that it is willing to consider how a ban might work.
Letting agents in Wales are currently able to charge tenants an agent fee before signing for a property. These fees are commonly collected to cover a range of administration costs, including immigration checks, credit checks and references. These costs will be scrapped if any ban is introduced in Wales, and the Government hopes a ban will save tenants hundreds of pounds and shift the cost of renting on to landlords.
Letting agent fees in Scotland have already been banned, and, despite no comprehensive research suggesting the ban has either helped or hindered the lettings market, the Welsh Government has faced criticism for not acting on letting agent fees sooner, with AMs from all opposition parties supporting a ban. Mr Hedges, AM for Swansea East, said that the fees are a tax on the poorest in society, and that the problem is worse in university/student cities such as Cardiff and Swansea, where demand for housing often outstrips the housing available.
The government has stressed that any ban on letting agent fees would result in hundreds of pounds in savings for tenants. However, letting agents in Wales have said that this may not turn out to be true as landlords may increase rents to offset any financial losses. Some letting agents have also expressed concerns that a ban may make it harder to professionalise the lettings industry, as a reduction in income means many agents will struggle to provide the same level of quality. Many people think letting agent fees are simply there to make money, however, agents have dismissed these claims saying that most letting agents aren’t profiteering by charging their tenants agent fees.
It must be stressed that currently, no ban on agent fees in Wales is in effect, and there has been nothing to suggest a ban is expected any time soon. Letting agents in Wales are still able to charge agent fees to tenants, but, as with agents across the country, they must legally publicise their fees so that tenants can shop around for the best deals.
As one of Cardiff’s largest lettings agents, we at CPS Homes know the property market like the back of our hands. Whether you’re a landlord looking for more details on the proposed ban, or a tenant looking for your next home in Cardiff, we can help. Get in touch with our friendly team today on 02920 66885, email firstname.lastname@example.org or pop into our Woodville Road office in the heart of Cathays. What’s more, don’t forget to keep checking our property blog for more details on the letting agent fee ban as and when they’re available.