New call for letting agent fees to be banned

A new call has been made for letting agents’ fees to tenants to be banned.

It has come from two bodies, the Chartered Institute of Housing, and the Resolution Foundation.

A joint report calls for regulation to implement the ban on fees, and extend the Estate Agents Act to cover letting agents.

It also calls for new legislation to tackle unscrupulous landlords.

The report additionally wants extra tax breaks to be offered to landlords who sign up for a national accreditation scheme.

It says this would raise standards in the private rented sector.

Private landlords currently receive around £7bn of tax allowances a year, including for repairs and maintenance, but the report says there is no incentive to carry out work above the minimum standards.

The report recommends:

  • Creating a single, easily understood set of minimum standards covering both property conditions and housing management, for landlords and making sure that sufficient resources are made available for enforcement.
  • Extending the regulation covering estate agents to letting agents and stopping letting agents charging tenants fees for their services
  • Considering the use of incentives by the government to encourage landlords to commit to higher standards.
  • Developing a nationally agreed set of standards for accreditation.

In setting new financial incentives for landlords, the report says the Government could consider:

  • Giving accredited landlords a more generous tax allowance for ‘allowable expenses’ (where landlords deduct the cost of repairs from their profits for income tax purposes), compared to unaccredited landlords.
  • Allowing landlords to treat any improvement needed to bring a property up to standard as an ‘allowable expense’, instead of deducting it from their capital gains tax liability when they sell the property – so they would get a more immediate tax benefit from the investment.
  • Allowing accredited landlords to benefit from capital gains tax rollover relief (meaning that if a rented property is sold and the proceeds are immediately reinvested in another, the landlord would not pay capital gains tax on any profit they had made).

CIH chief executive Grainia Long said: “This government has focused on measures to boost home ownership, but with more and more people living in the private rented sector – including more older people, more families with children and more vulnerable people from the housing waiting list – it’s vital that we look at new ways to raise standards.

“The cost of housing means that for many people, the private rented sector is the only option – but too many of them are having to put up with poor standards and insecurity.

“Ultimately, we want people to have a good choice of housing at a price they can afford, so we need to make private rent a better option.”

x

Email the story to a friend



2 Comments

  1. MF

    Why is the call always to ban fees to tenants, rather than to cap them? Maybe it's a recognition of Government's failure to police the current requirement to display all fees chargeable to tenants. I mean to say, has their even been one prosecution on this legal requirement as yet?

    Report
  2. Woodentop

    Does this mean we will next see banning lenders admin fees to applicants?

    Report
X

You must be logged in to report this comment!

Comments are closed.

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.