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STOP PRESS: Chancellor confirms lettings fee ban in housing focused Autumn Statement
Original Author: Marc Shoffman
Chancellor Philip Hammond has used his first, and it turns out last, Autumn Statement to announce a ban on lettings agent fees in England. The ban will come in “as soon as possible”.
Future Budgets will now be in the autumn, with a Spring Statement which it appears will be used as a monitoring device for the policies already announced.
Hammond also launched investment in housing worth just over £3bn.
The move, which comes days after Baroness Grender’s Renters’ Rights Bill passed the House of Lords committee stage, Hammond told MPs: “In the private rental market letting agents are currently able to charge unregulated fees to tenants. We have seen these fees spiral, despite attempts to regulate them, often to hundreds of pounds.
“This is wrong. Landlords appoint lettings agents and should meet the fees. We will ban fees as soon as possible.”
It comes despite housing minister Gavin Barwell previously signalling opposition to such plans. He has previously tweeted that fee bans are a “bad idea” as landlords would pass the cost to tenants via rent.
However, today he seemed to backtrack, stating: “It is the nature of the job that you have to defend current policy even when you are working to change it.”
It will be seen as a victory for campaigners such as Shelter but lettings agent and landlord groups have reacted with dismay. The buy-to-let industry is already coping with increased Stamp Duty, the end of the wear and tear allowance and the incoming rolling back of mortgage interest relief.
Research from property listings website The House Shop suggests that the average fees charged to tenants in the UK sits around the £300 mark, increasing up to £700 in some cases in London.
It said a letting agent will typically charge a landlord between 10-15% of their rental income for a full management service – so based on the average UK rent for October 2016 of £902 per month, this would equate to roughly £95 per month, or £1,140 over the course of a 12 month tenancy.
Adding in the additional costs of passing on tenancy fees (£300), this would increase to £1,440, or an extra £25 per month.
See some of the responses when reports of the announcements emerged earlier today.
Hammond also announced a £2.3bn Housing Infrastructure fund to build 100,000 new homes in high demand and a further £1.4bn for 40,000 additional homes.He said: “For many the goal of home ownership remains out of reach. The challenge is not a new one but the effect of unaffordable housing on our nation’s productivity is an urgent one.”
He also announced a regional pilot of Right to Buy for housing association tenants and said a White Paper on the “long term challenges” of affordable housing would be released “in due course.”
Mark Hayward, managing director of the NAEA, said: “The creation of 40,000 new homes that this new funding is expected to deliver is still painfully short of the number of affordable homes we need to solve the housing crisis and get first time buyers on the housing ladder.
“It is vital that the Government uses this to signal a radical rethink in its housing strategy and consider measures such as building homes on unused Green Belt land to really kick start the house building boom we badly need.”
http://www.propertyindustryeye.com/stop-press-chancellor-confirms-lettings-fee-ban/
