Scrapping letting agent rip-off fees for tenants will result in another government stealth tax, say landlords.
Cynical buy to let landlords suspect the move will mean they must fork out to pay the fees instead of renters with the result that rents will rise to cover the cost.
The fees are the array of costs tenants must pay to move into a new private rented home.
Letting agents have scores of names for the fees, but they are basically charges for arranging viewings, taking references, sorting out tenancy agreements and drafting inventories.
The fees can add at least £1,000 to the cost of renting a private home.
Chancellor Phillip Hammond announced in his Autumn Statement 2016 that letting agents in England will face a ban on charging tenants.
Letting agents in Scotland are already forbidden from making the charges and the Welsh Assembly has signalled similar laws are on the way.
But landlords feel the measure is just another stealth tax aimed at making renting private homes more affordable.
National Landlords Association CEO Richard Lambert said:
“Some unscrupulous agents have got away with excessive fees and double-charging landlords and tenants for far too long. Banning letting agent fees will be welcomed by private tenants, at least in the short-term, because they won’t realise that it will boomerang back on them.
“Agents will have no other option than to shift the fees on to landlords, which many will argue is more appropriate, since the landlord employs the agent. But adding to landlords’ costs, on top of restricting their ability to deduct their business costs from their taxable income, will only push more towards increasing rents.”
A briefing paper published in the House of Commons Library for MPs explains how letting agents are regulated in England