The ban was announced in the 2016 Autumn Statement – taking many in the industry by surprise.
But with the Tories pledging to support those ‘just about managing’, – Theresa May’s JAMs – and desperate for a share of the youth vote it is perhaps unsurprising. The government said the proposed ban will “stop hidden charges and end tenants being hit by costly upfront payments that can be difficult to afford”.
It also says that the move will bring an end to the small minority of agents exploiting their role between renters and landlords, banish unfair charges and stop those agents that double charge tenants and property owners for the same service.
ARLA branded the move ‘draconian’, however with a report from Citizens Advice last year showing tenant referencing fees in Oxford ranged from £15 up to £360 and a ‘mystery shopping’ exercise in Wales showing the highest fee was 12 times the lowest, there is clearly an issue.
There is an argument that landlords will now have the opportunity to ‘shop around’ – which will force agents to be more competitive.