A decision has been made to abolish letting agent fees in England and Wales in a move that will follow that of Scotland, after Chancellor Phillip Hammond confirmed the news within the 2016 Autumn Statement.
The changes will mean that landlords will now have to make it a priority to choose their agents wisely and make their decision based on what will be the most cost effective for them, with the competition between landlords expected to be significantly increased as a result.
So is this the correct decision? Or will the removal of the letting agent fees only lead to an increase in rent prices and affect people looking to rent homes in England and Wales negatively in the long term?
“A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market” commented David Cox, the managing director of Association of Residential Letting Agents (ARLA). “It will be the fourth assault on the sector in just over a year, and do little to help cash-poor renters save enough to get on the housing ladder. The decision is a crowd pleaser, which will not help renters in the long term.”
Despite the amount of opposition to these plans based on the claims that the fees are completely necessary and there is no profit involved, Chancellor Phillip Hammond has expressed the need for the changes based on spiralling agency fees that have got out of control and should be dealt with by the landlord who appoints these letting agents.
Whichever side of the argument you are on, the plans have been outlined and will almost certainly be going ahead in a move that is set to change this sector significantly. Whether this will be for the better in the long run we shall have to wait and see.