Landlords and agents are urging the Government to ensure the lettings fee ban doesn’t unnecessarily increase workloads.
The National Landlords Association (NLA) has warned that a referencing fee currently deters tenants from providing false information or bidding on multiple properties, but if all fees are banned there is nothing to stop them potentially wasting time looking at several homes with a number of agents.
EYE has also sought clarification on whether tenant referencing would harm a renter’s credit score, and it transpires it won’t, meaning that with no fee to pay, they could apply for multiple properties with as many agents as they like.
James Jones, of credit reference agency Experian, told EYE: “Searches created by applications for credit can impact your credit score, but this does not include tenant checks.
“Other types of searches leave footprints that are visible to consumers but they are not used to calculate credit scores.”
Chris Norris, head of policy at the NLA, warned that the Government’s “unflinching approach” to the ban presented landlords or their agents with substantial extra risks and workloads, saying: “It takes away any simple means to determine that a tenant is genuinely interested in securing a property and that, above all, there are no red flags next to their name when it comes to their ability to meet the rental commitment.
“Currently the ability to charge a reasonable fee for referencing acts as a barrier to applicants deliberately providing false information in order to obtain a tenancy or bidding on multiple properties, but it is a lack of transparency and consistency in charging these fees that has led to the Government’s intervention on this issue.
“As part of the consultation process both the NLA and the UK Association of Letting Agents will be making the case for any future system to provide a clear commitment from all parties involved, which might mean landlords or agents sharing the relevant, legitimate, costs with tenants where necessary.”
Aaron Cambden, owner at Fairview Estates, shared similar concerns.
He said: “To date, we have not been given any details from the Government apart from ‘fees will be banned’ and it’s difficult to say exactly how this will affect us until the law is in place.
“A ban on letting fees could mean tenants applying for a property whilst still looking and deciding to move elsewhere. Or applying for two properties and then making their mind up. It also means a tenant can apply for a property with no consequences, i.e. they know they have bad credit but give it a go and if they don’t pass, no risk.
“This means the landlord will have longer void periods due to having to take a property off the market and then putting it back on.
“As it stands, we’re hoping that we will be able to take a deposit off the tenants upon their application for a property which can be taken off the balance when they move into the property. This would hopefully reduce our workload and deter time-wasters.”