Warnings about the consequences of the Tenant Fees Act, which comes into force a second after midnight tonight, continue to pour in.
ARLA chief executive David Cox said: “For renters, the ban on tenant fees, which takes effect this weekend, will sound positive. However it won’t save them money in the long run.
“Tenants will continue to pay the same level as before, but this will be passed on to them through increased rents, rather than upfront costs.
“Research we conducted with Capital Economics revealed the fees ban will increase the average rent for tenants by approximately £103 per year.
“While those who stay in tenancies for less than two and a half years will see savings, those in long-term tenancies, which tend to be lower income families, will suffer.
“Based on an average rent increase of £103, those in tenancies for ten years or more will lose out by £755.”
A number of agents have issued similar warnings.
Daniel Gibson, of Daniel Craig Residential, which has over 1,000 properties across the north-east, said that some agents in the region are re-packaging their charges into higher rents.
He had spoken to one tenant who currently pays £615 a month in rent to another agent.
The tenant said she had recently taken a call from her landlord who said that instead of paying an annual renewal fee of £50, the agent was instead raising her rent by £25 a month.
The tenant said that her landlord would not be receiving any of this extra money.
Gibson said his own company had taken steps to offset the loss of income, including moving to a cheaper office.
Glynis Frew, CEO of Hunters, said: “A recurring theme seems to have emerged over the last few years when it comes to government housing policy – good intentions bringing undesirable consequences.
“It’s frustrating because the industry and Government are actually joined up in their desire to ensure that tenants get a fair and honest deal.
“A small number of rogue agents or landlords have charged mind-boggling fees over the years. That’s a sad reality, but that’s not a fair reflection of the industry as a whole.
“Agents and landlords proposed and would have embraced fee caps, but the Government chose to reject those calls.
“It now needs to ask itself if this legislation is going to do the job it is intended to do.
“Will this really benefit tenants? Market forces will take their natural course and rent increases are likely to follow in many locations, especially where tenant demand is strongly outstripping supply.”
She added: “In a period of four prime ministers, there have been 17 different housing ministers spanning 20 years.
“Maybe if we had a housing minster that stayed long enough to understand the housing industry and the market, we would all do so much better. Housing should not be a vote-winning political football.”