Time to ban letting fees
With plans to end letting fees in England, CIH director Nicola McCrudden says it’s time scrap them in Northern Ireland.
More than six months after first suggesting the idea, the UK government has announced plans to ban lettings agents’ fees in England.
A new Tenants' Fees Bill, announced in the Queen's Speech, will stop tenants having to pay money to agents. The commitment was announced by the Conservatives in the 2016 Autumn Statement.
These fees are already banned in Scotland, as well as in Ireland where letting agents are also required to be licensed and follow a code of practice.
Northern Ireland has fallen behind other jurisdictions when it comes to the regulation of letting agents and it’s time to change. More people are renting privately than living in social housing. The sector has grown considerably and currently represents one fifth of the housing market.
A recent Department for Communities (DFC) consultation on the private rented sector found there was “clear consensus” on the need for some form of letting agent regulation “to protect both tenants and landlords”.
The DFC report said 72% of tenants who responded to its survey deal directly with a letting agent and there were “many references to tenant dissatisfaction with the poor service delivered by many letting agents particularly around the fees for various checks”.
Letting agents can be affiliated to an accredited body for example the National Association of Estate Agents, ARLA or the Royal Institute of Chartered Surveyors. This is welcome and there are examples of very good practice amongst some local letting agents - but it is voluntary and fees remain unregulated.
It is difficult to obtain accurate figures as fees are not always openly advertised. A mystery shopper exercise carried out by Housing Rights in 2013 showed that the majority of letting agents charged fees and most did not advertise the costs which ranged from £25 to £100. The average fee then was around £50 - an up front cost normally charged in addition to a deposit and one month’s rent in advance.
With social housing shortages, the private rented sector is playing an increasingly important role in meeting the housing needs of families on lower incomes. Last year around 69,000 private tenants were in receipt of housing benefit - 42% of all housing benefit claimants. Research carried out by the Chartered Institute of Housing in 2016 showed that 80% of the Local Housing Allowance rates (for housing benefit) across Northern Ireland no longer cover the cheapest 30% of the private rented market.
Affordability is clearly an issue for many tenants and there is a case for ending unfair and unnecessary tenant charges. CIH would welcome a regulatory framework for all letting agents so that tenants and landlords could be confident that their properties were being managed by competent, professional letting agents.