An experienced property management consultant has warned that the new Tenant Fees Act could end up hurting the very people it is supposed to help.
Daniel Gibson, the Director of Daniel Craig Residential, who we previously interviewed before the ban became active on June 1st believes that the changes to the law will mean more costs being inevitably passed onto tenants.
Mr Gibson explains: “This new Act means that the letting charges which would normally be split between the tenant and the landlord, now have to be completely paid by the landlord,
“And that means landlords will be looking at ways to recoup the money which will inevitably come back to the tenants.”
Under the previous system, estate agents could charge fees to both tenants and landlords for a wide series of actions, including referencing fees, handling fees, and deposit fees. However, from June 1st these fees are now prohibited to be charged to the tenant, resulting in many agents across the country losing revenue.
The government argue that the Tenant Fee Act is intended to “reduce the costs that tenants can face at the outset, and throughout, a tenancy”. While this is the intention, research carried out by Daniel Craig reveals that the average landlord fee for letting a property has doubled – a charge that the landlord will attempt to recoup from their tenants.
In order to help his agency be more competitive in a post tenant fee world, the firm has moved to a new, lower-priced office and is using the company expertise in portfolio development and management to look at other ways to save.
Mr Gibson concludes: “We believe we will be able to offer a very attractive option for landlords who may be facing a huge increase in their management fees through their existing agency or might be considering having to self-manage,” said Daniel.
“The savings we are putting in place across Daniel Craig Residential means that landlords we work with will not feel the effect of the Act.”