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4,000 agents could lose jobs following ban on fees
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
New research released by ARLA Propertymark suggests that there are 4,000 jobs at risk, should the proposed ban on agent fees come into force.
In a report presented to the organisation’s annual conference, ARLA said that the ban could cost tenants thousands of pounds.
Funds
The research reveals letting agent fees make up around one fifth of letting agent revenues and provide vital funding for imperative checks required to set up tenancy agreements.
Should fees be banned outright when the Government publishes its consultation, agents will be left with little choice but to pass the cost onto landlords in the form of higher agent fees.
ARLA’s research suggests that 41% of landlords expect that they will have to pass on some of this inflated cost to their tenants. On average, these rises will amount to £103 per year.
If landlords were to pass on the entire uplift in letting agent fees, tenants would be hit more, with typical rises of £275 per year.
In addition, there would be a huge impact on the lettings sector overall, which employs roughly 58,000 across the country.
4,000 agents could lose jobs following ban on fees
Risks
The report states: ‘If letting agents take the full hit of the letting agent fee ban, 16,000 jobs will be at risk. It’s more likely however agents will pass on 75 per cent of the costs to landlords, which would result in job losses of around 4,000.’[1]
More side effects from the proposed ban include 27% of landlords choosing not to purchase any more rental properties. 20% meanwhile said that they would sell some of their portfolio.
ARLA’s report shows that in Scotland, letting agent fees were banned in 1984 and clarified in the Private Rented Housing Act of 2011.
The report goes on to say: ‘This meant that tenants were only accountable for the rent and deposit, and everything else would be charged to the landlord. However, this has resulted in many agents carrying out less of the tasks they were doing previously. Worryingly, one in four said they no longer do credit checks as standard.’[1]
[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/3/4-000-letting-agency-jobs-at-risk-if-fees-ban-happens-warns-arla
