The cost of renting a home in Lincoln could rise following the ban on tenant fees announced in the Autumn Statement, local letting agents have said.
Letting agents in Lincolnshire have said an increase in rents is likely following an all out ban on tenant fees, as announced in the Autumn Statement.
Chancellor of the Exchequer Philip Hammond confirmed the ban in a bid to stop landlords and letting agents from charging extortionate fees for referencing and other costs associated with a new letting contract.
However, local experts say that this will cause these costs to be charged to the tenant in another manner possibly with an increase in rent.
Steven Spivey, Partner at Lincoln letting agents Mundys, said: “The proposed ban on tenants application fees as set out in yesterday’s Autumn Statement is not likely to come into effect immediately as it now needs to go through a public consultation process, followed by the grant of a new act of parliament.
“The proposals have been brought forward to protect tenants from rogue letting agents who charge ridiculously high fees to tenants.
“The fact is that there are costs associated with referencing tenants, preparing tenancy agreements, producing inventories and registering tenancy deposits.
If these costs are to be borne by the landlord, they will ultimately be recouped from the tenants in the form of increased rent which, in the long term, will cost the tenants more.
“Surely a more sensible approach would be to place a cap on the amount of application fees that letting agents can charge?”
Tim Downing, Director for Pygott & Crone, also believes that these costs will be reassigned.
He said: “Ultimately the cost of moving into a rental property is currently spilt 50/50 between the agent and the landlords and it’s highly likely that the costs will just be shifted elsewhere.
“In turn, this could create a hike in monthly rental fees in addition to landlords already being hit with a recent rise in stamp duty and major offset taxation changes.
“While the rental market in Lincolnshire remains fairly stable at the moment, unsurprisingly there has been an overall drop in the purchase of buy-to-let properties. However, the number of people investing in properties to rent from outside of the country remains high.
“Lincolnshire still remains one of the most affordable places to buy property in the UK, but it’s all relative when cost of living and wages is factored in.”