Letting Fees Ban - A Different Way

fees ban
This discussion document puts forward a constructive – and compelling – alternative to the proposed ban on tenant fees.

 

1. Executive summary

Drawing upon wide-ranging evidence, experience and expertise, its overriding aim is to present the Government
with a window of opportunity to develop and deliver ‘A Different Way’ and, in turn, a sustainable future for
England’s housing sector which is creaking under pressure

It promotes a new purpose-designed model that is innovative, unprecedented and, above all, viable – with
the ability to be mobilised at scale, and at pace.

Uniquely, it is a concept which directly benefits tenants (particularly the most vulnerable), landlords, the private
rented sector, and the Government. It would tackle head-on, and future-proof, both the acute and chronic
challenges facing the wider housing sector.

At its cornerstone is the launch of a mandatory levy - paid into an independent fund by all agents on every new rental transaction - that would break new ground for the industry.

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We estimate that this would generate between £30m-£50m each year, which would be used to:

`` Actively support the expanding work of homeless charities as well as health and social care agencies,
to equip them with a raft of extra resources to make a genuine difference.

`` Make a significant financial contribution to ensuring the lettings industry is robustly regulated for the first time in its history, propelling it into a new era of best practice. It would also pay for the infrastructure to ensure enforcement.

`` Fund much-needed research into developing and delivering long-term solutions to the growing number of
recognised pressures that together serve as a ticking timebomb for the property market across all corners of
England.

In an unprecedented way, it would remove the conflict of interest that exists and instead promote a real community, bringing everyone closer together and creating the platform for solving the looming housing crisis as a common goal.

Crucially, it would single-handedly prevent the unintended and far-reaching consequences of the
Government’s current proposal from becoming stark reality for many – perversely hitting hardest the very people that the Government is seeking to help.

There is a clear precedent for introducing a levy. Our scheme would mirror, and learn lessons from, similar successful schemes in other sectors – for example the Apprenticeship Levy, which major employers pay to help fund apprenticeships and other initiatives to bridge the yawning skills gap.

Wedded to the introduction of a levy – which we maintain is a natural progression -our proposal makes provision for a cap on tenant fees across the board.

This approach would ensure equity across agents throughout England and add a further dimension to our
determination to safeguard the most vulnerable tenants in our society.

Our proposed model carries widespread support across our industry and has been endorsed from an academic
standpoint by a leading independent housing analyst.

For full details, please download Lettings Fee Ban - A Different Way in full here

fees ban alternative front cover

 


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The Property Ombudsman
Association of Residential Letting Agents
Association of Residential Letting Agents
On the Market January 2015
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