Letproof Blog

Letproof Blog

Welcome to the Letproof.com blog. We aim to bring you up to date on things happening in the property market.






One of the big changes coming for the private rental sector in the imminent future is the banning of letting agent fees. Andrew Turner, chief executive at Commercial Trust Limited, examines some of the implications this might have for landlords.   

In the Autumn Statement, in November 2016, the Government first suggested the concept of a ban on letting agent fees, in a bid to provide a fairer, more transparent process for tenants, which would make renting more affordable.

Bringing this issue into law has at the time of writing, become a long process, with many considerations, not least of which is the implications for the landlord.

At the Conservative Party Conference in October, Communities Secretary Sajid Javid reinvigorated the discussion, announcing a number of proposed lettings regulations and stating that the proposed lettings fees ban legislation was imminent.

A month later, the Government released its draft bill, which the Department for Communities and Local Government said will help “millions” of renters.

A number of issues were raised, which are set to be debated in Parliament before passing into law.

These will potentially have an impact on buy-to-let landlords.

The key points of the proposals are as follows:

  • Holding deposits will be capped at a maximum of one week’s rent;


  • Security deposits will be capped at a maximum of six week’s rent;


  • A protocol is to be put in place for the return of the holding deposit to a tenant;


  • It will become a civil offence for any agent OR landlord to break the ban, with first-time offenders liable to incur a fine of up to £5,000;


  • Any agent or landlord breaking the ban twice within a five-year timeframe will be committing a criminal offence and will be liable for a fine of up to £30,000 or criminal prosecution;


  • Letting agents will not be permitted to double charge tenants and landlords for providing the same services;


  • Trading Standards are set to enforce the proposed ban.


But the proposed changes go further.

In October, the Government also indicated that it intended to make it mandatory for all buy-to-let landlords to register with a redress scheme, something that already applies to all letting and estate agents.

The details remain unclear at the time of writing, but the Government objective is to create a clearer, smoother process for tenants to voice complaints about poorly managed properties, whilst also establishing a housing court where grievances can be heard and judged.

In his speech, Javid indicated that the proposals would also be aimed at improving the process and time it takes for a landlord to regain possession of a property.

The proposed letting agent fees ban could result in agents increasing the cost of their services, which it is widely felt will be passed on to landlords.

Landlords may face a quandary: Do they take a more hands-on approach to managing their properties – taking into account the extra time and potential costs this would incur, do they put up rents, or, do they swallow the bitter pill of more expenses?

Each landlord will have their own opinion, based on their individual circumstances. For those deciding to dispense with the services of letting agents, there are many things to consider:

  • Sourcing tenants can be time-consuming and involves a lot of administrative work. This includes credit checking, referencing and ensuring that a prospective tenant has the legal right to rent in the UK and provides the correct documentation to evidence this. Failure to comply with the latter point can land a landlord in serious trouble.


  • Checking rental payments, renewing tenancies, visiting the property and dealing with any maintenance problems or issues that may arise directly with the tenant, can all take up an enormous amount of time.


  • Staying up to date with changes in the law and how these affect landlord responsibilities may take up a lot of time but will be critical to keeping the right side of the law.


Commercial Trust Limited will be monitoring what happens with great interest over the coming weeks and months as the private rental market adjusts.

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