Report says banning letting fees will have no negative impact on PRS

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A ban on letting agent fees in England would have no negative impact on the private rented sector, a study of the Scottish market has revealed.

Commissioned by housing charity Shelter, the report found that the lettings market in Scotland has grown since fees were banned in 2012, with 54% of agency managers saying that the ban had been positive for the sector.

According to Shelter, a ban on letting fees in England is likely to have no major negative impact on the PRS.

The charity has been calling for an end to letting agency fees in England, as separate Shelter research showed that "sky-high" fees were pushing one in four renters into debt.

Shelter’s mystery shopping research found that almost a third of agencies investigated charged renters more than £400 to set up a tenancy, and a further seven (12%) charged more than £700.

The most recent study, carried out independently by Scottish letting agency and property consultant Retties and research agency BDRC surveyed agencies, landlords and renters across Scotland. It showed that, in the last 12 months:

• Nearly 60% of letting agency managers said the ban had no impact on their business, with 17% saying the change was positive for their business.
• Renters in Scotland haven’t reported unexpectedly higher rents than two years ago.
• The majority of landlords who use agents (70%) had not noticed an increase in their fees and fewer than one in five letting agency managers said they increased their fees to landlords.

Shelter is warning that measures introduced to increase the transparency of fees to renters are not working, with the charity hearing that many agents are still failing to disclose fees up front.

Roger Harding, Shelter’s director of communications, policy and campaigns, said: “This research shows that charging letting fees to renters is not only unfair, but unnecessary, as banning them in Scotland has had a positive effect on the market and renters’ lives.

“Landlords are the real customers of a letting agency, and yet renters are being charged often huge fees for services that landlords are already paying for – something that is unheard of in other industries.

“Putting an end to letting fees to renters is the only way to stop double charging and make the market genuinely transparent. Now that we know it can be done without having a negative impact on the lettings market, politicians must take action and stand up for England’s nine million renters, now."