Private renters currently have a number of costs to take into account before they can think about getting the keys, including up to two months’ rent as a deposit, the first month’s rent in advance, as well as any letting agent's fees . That is set to change although renters will have to wait a while longer yet.
Landlords may already have been aware of the proposals to ban letting agents fees and to cap the size of the tenancy deposit that can be taken. Now the newly named Ministry of Housing, Communities and Local Government has confirmed that the rule changes have been pushed back to 2019.
A spokesman said: “This government is determined to make sure the housing market works for everyone. That’s why we’re delivering on our promise to ban tenant fees, alongside other measures, to make renting fairer and increase protection for people in the private rented sector.
“We announced our Tenant Fees Bill, which has been first published in draft so it can be fully scrutinised by everyone affected. As confirmed in our written evidence to the Communities and Local Government Select Committee, we expect the ban to come into force after spring 2019.”
A cap on tenancy deposits to the value of 6 weeks rent is higher than the originally mooted 4 weeks rent cap. Nonetheless it is perhaps another reason why it is reported that 20% of landlords are planning to reduce the number of homes in their portfolios this year. A number of regulatory changes and taxes introduced are seen as undermining the viability of many landlords' businesses and, in turn, removing the incentives to invest in new residential property at a time when the demand from potential tenants for rented property is higher than ever.
For those landlords who are going to "stick things out" then it would not be surprising to see an increase in the rent charged in light of the letting agents fee ban. Agents will still charge landlords for their services and if some of those costs cannot be recovered from the tenants, the landlords will pick these up.
With so much focus on the costs of getting on to the first rung of the property ladder, the challenges facing those simply trying to get into the renting market are often overlooked. However, for young people unable to call on family or friends to front up the significant costs of moving into a rented property, the options are limited. For those straight out of education, it can be the biggest financial outlay they have had to face. A deposit of up to two months’ rent, plus letting fees, plus the first month’s rent, can add up to thousands of pounds.