Proposed lettings fees ban not putting landlords off using an agent
The majority of landlords in England and Wales who use a letting agent will continue to do so when letting fees are banned, according to new research.
Overall 79% of landlords think their current letting agent will increase their fees as a result of the proposed ban on charging tenants fees for business letting services, the survey from the UK Association of Letting Agents (UKALA) has found.
However, just 9% of landlords say they will part ways with their agent if their premiums rise but they are planning how to mitigate costs as a result of the ban which is currently out to consultation.
Some 40% of landlords said they would increase rents to cover the cost, 22% said they would look to shop around for a better deal, 13% would attempt to negotiate or refuse to pay, 9% would pay the additional fees while 9% would leave their agent and 7% are currently unsure about what they would do.
The findings contrast with other recent research from UKALA which showed that 47% of landlords would forego the services of their letting agent if their profits fall as a result of change to tax due to come into play next month.
Both sets of research were undertaken by UKALA in conjunction with the National Landlords Association (NLA), in order to better understand the impact that recent Government policy decisions will have on the professional lettings sector.
‘UKALA agents strive to provide a premium service which represents excellent value for money, but the ban on tenant fees could leave hundreds of professional businesses with no other option than to increase fees for their landlord clients,’ said Richard Price, executive director of UKALA.
‘This research is reassuring for agents in some ways as it shows the majority of landlords will retain their services even if they have to pay more which is testament to the essential role that agents play,’ he pointed out.
‘However, one in 10 landlords say they will turn their back on their agents if fees are passed on, and our previous research shows that a significant number will do the same if the impending tax changes take hold and erode their profits,’ he added.
‘It leaves a tricky path ahead to navigate for agents as they’ll need to balance out the need to cover their costs in the wake of a ban on tenant fees without alienating their primary customers and source of income,’ he concluded.