Tenant Fees Bill

Written evidence submitted by Simon Hardy, Director, Harvey Scott Cheshire Ltd (TFB04)

Dear sir or madam,

Since the unexpected announcement that the government WILL ban tenants fees and the subsequent consultation period, it appears the government have not listened to the Stakeholders. Even Shelter and Generation Rent have now come to the conclusion that rents will rise as a result of this bill.

The simple facts are;

1. Agents will either have to pass the cost of referencing applicants and administrating tenancies onto the landlords, reduce their standards or worse, cease trading. Just so we are clear; my business refuses to reduce our standards

2. Costs passed onto landlords who are already squeezed by scrapping mortgage tax relief, and other expensive legislation, will either push the additional costs onto the rent price or give up and leave the sector

3. Landlords leaving the sector will result in a further loss of stock, increased demand and inevitably result in higher rents

4. With lower stock Landlords will have the pick of applicants and will inevitable choose those more affluent over those receiving social support, resulting in more strain on the council’s housing problem

We believe that tenants should pay the fee for referencing them to ascertain their suitability to rent the proposed property. I don’t believe this should be paid for by the landlord

This whole process has been started by a woman who had the ear of her 200,000+ readership because she was aggrieved by the cost of renting a property in central London. We do not live in central London and the cost here is reasonable and affordable to the vast majority of tenants, those for whom it is not affordable need the assistance of the council and they receive it here in East Cheshire and probably across the rest of the UK. Who is this policy going to hurt the most? Those living outside of London. If the editor of some magazine in London’s rent goes up a bit, she will not notice. But here it is a different matter;

Two adults renting a home in Macclesfield are charged £260, by Harvey Scott, to be referenced to take a home here. If we pass this fee onto the landlord, they will spread the cost over number of months of the let. Let’s say we agree a twelve month let on a £575 house, the rent will go up to £595. Every month after the twelfth, the tenant will be paying more. If the tenants stay the average of 30 months, they will eventually pay an additional £340 throughout their tenancy. If the fee is divided by six months this is even worse! This rent increase is inevitable even before the lack of stock is exceeded by demand which will further increase rents. Is this not reason enough to scrap or amend this bill?

I believe fees should be capped to a reasonable level across the country , ours have always been reasonable if not cheap for the 15+ hours of work it takes to process a let. This is the only solution that makes sense.

May 2018

 

Prepared 4th June 2018