Buy to let landlords have yet another business cost to swallow as Chancellor Philip Hammond confirmed letting agent fees for tenants will be scrapped in England.
In his 2016 Autumn Statement, Hammond spoke out against greedy letting agents who can charge up to £500 for arranging a tenancy.
Housing charities reckon the average cost of finding a new rental home is £223 for a tenant.
Letting agents charge for services like checking references and drafting tenancy agreements.
“In the private rental market, letting agents are currently able to charge unregulated fees to tenants. We have seen these fees spiral, often to hundreds of pounds. This is wrong,” said the Chancellor.
“Landlords appoint letting agents and landlords should meet their fees. So, I can announce today that we will ban fees to tenants as soon as possible.”
The fees are already banned in Scotland and the Welsh Assembly is considering similar action.
Buy to let landlords have faced a flood of tax changes by the government in recent months.
This year saw a hike in stamp duty and capital gains tax rates for property investors and the scrapping of a 10% wear and tear allowance on furnished lettings.
From April, higher rate taxpayers will see a new measure start to be phased in by 2020 which will slash finance relief on mortgages by half.
The impact of the tax change may be over estimated by some landlords as Hammond also confirmed a pledge made by predecessor George Osborne to lift the personal tax-free allowance to £12,500 by 2020 – and to increase the threshold for paying higher rate tax to £50,000 by the same date.
Meanwhile landlords earning rent or holiday home income of less than £1,000 a year will not have to declare or pay tax on the money under a new property income allowance likely to start from April 2017.
Does anyone know how to find out when Agents will no be able to charge fees to renters?
It will be a little time away just yet as the consultation hasn’t started yet (but is scheduled for very soon). I doubt they could have it ready for April this year but maybe October (another favoured time for new legislation) onwards.