Lettings fees to be abolished in 2017

Chancellor Philip Hammond presented this year’s Autumn Statement with plans to ban letting agents from charging fees to tenants.

Figures from the Index of Private Housing Rental Prices (IPHRP) show that student accommodation costs have risen 18 per cent from September 2011 to May 2016.

Campaigners have said that despite this rise in costs, the quality of student accommodation has not improved. According to Vice-President of Welfare at the National Union of Students (NUS), Shelly Asquith, the average student rent is totalled to 85 per cent of the maximum student loan and grant available, leaving a small amount of money for other expenses.

Lettings and managing agents were legally obligated to publicise their fees in 2015, which saw amounts varying widely in cities; an average of £1,000 paid towards upfront costs. Until now, letting agencies were able to charge both tenants and landlords for administrative services, including checking references, preparing tenancy agreements, renewing tenancies and ending contracts.

The agencies will now need to pass more of those charges on to landlords, or deal with part of the costs themselves.

Some UEA students are anxious that finding a house may become even more difficult as the plans have been viewed as counter-productive. Georgia Eagleton, a second-year Pharmacy student, said she was worried that “the race for students to find the right house might become even more competitive.”

Landlords have described concerns with not being able to meet their property service charges, insurance and mortgage bills, only leading to an increase in competition to grab the cheapest agent.

In cases where landlords increase rents, students could find themselves having to sacrifice more of their spending to pay for the same house that other students had paid less for in the previous years. The ban may also hurt estate agency businesses expecting to expand their lettings divisions as the amount of homes being bought and sold remain low across England.

The government say they believe that the move will save an estimated 4.3m households hundreds of pounds, as tenants will no longer have to face non-refundable deposit charges in tenancy agreements.

John Wheeler who works for the Prolet lettings agency in Norwich, said of the plans that he hopes “a positive outcome is reached which will not affect in particular the more vulnerable tenants who may ultimately be disadvantaged.”

Regarding students’ worries of about potential rent increases, SU Campaigns and Democracy Officer Amy Rust said: “Although the theory is that landlords will absorb the increase, the feedback from those we talk to suggests that in the student market the extra costs will lead to higher rents.”

Rust added that “there’s a looming crisis” for Norwich student housing, describing “a perfect storm of more regulation, increased student numbers and concern from the local community.” She said that these factors “could see huge numbers of homeless students. ”

UEA’s Student Union are calling on university management and Norwich City Council “to develop and publish a Norwich wide student housing plan to ensure we spot and avoid these problems before it’s too late,” according to Rust.


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September 2021
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