The lettings fee ban entered into law, and now as of 1st June 2019, landlords and letting agents will be banned from charging letting fees. This law only applies to England, Scotland already has a similar law in place, while a bill is currently in the Welsh parliament, and they are still valid in Northern Ireland.
As of 1st of June 2019, landlords and agents will no longer be able to charge for the following services:
|Charging for guarantors|
|Cleaning services when entering or vacating a property|
|Renewal and/or exit fees|
Additionally, deposits will be capped at 6 weeks rent, and tenants will only have to pay 1 weeks rent to place a hold on a property.
The only things landlords and letting agencies will be able to charge for are:
|Utility bills and council tax|
|Early termination of the tenancy (requested by the tenant)|
|Fines for late payments and other “reasonable” costs, such damage to the property|
For years letting fees have been often been a valuable source of additional income for agents and landlords, which has enabled them to maintain competitive prices.
The ban will likely hit small and independent agencies harder as several reference fees can mean a lot of income that keeps their business afloat.
Given that landlords and agents will have to get used to life without letting fees, they will have to make some changes to become more efficient.
Perhaps the best way to save costs though is through using property management software. By utilising technology, you take advantage of several benefits that can compensate the loss of the lettings fees. These include:
The lettings fee ban is an unfortunate loss of revenue for landlords and letting agents, and they will have to make adjustments to compensate for this reduction. However, with the right measures taken, property managers and letting agents can make sufficient savings in their day-to-day operations that can offset the loss of this income by becoming more efficient.
If prop tech software is used correctly, it means that landlords and property managers can solve tenant problems as soon as they come up, they can instantly contact an electrician for an electrical problem, a plumber for leaks etc. and quickly be told if they have accepted the job, and the tenant is informed along each step. This makes it more likely to make tenants want to stay in their rented accommodation, and therefore the efficiency provided by Property Management Software can lead to long-term savings.