Buy-to-let landlords should be responsible for paying letting agent fees in Wales, despite some concerns that this will lead to higher rents as landlords seek to pass on the costs, according to the Welsh government.
A Welsh government report claims that there is “no compelling evidence” for tenants to pay upfront letting agent fees or renewal costs to existing tenancies because “the large majority of the work undertaken by agents is work that the landlord would otherwise be doing themselves”.
The report also acknowledges that “referencing tenants is a service to landlords, not tenants and that there is “work involved for agents setting up a new tenancy” and that they “do not generally make excessive profits on setup fees in relation to costs incurred”.
The report added: “Inventories and tenancy agreements do protect both parties from false accusations, but it is soon to be a legal obligation on the landlord to provide a tenancy agreement, and therefore it is a service to the landlord to do this job for them.
“Arranging viewings and advertising a property are also a service to landlords, just as a job advert 60 is paid for by the employer, and estate agents charge sellers, not buyers, to advertise their home.”
The Welsh government launched a consultation on banning fees to tenants last month, after announcing on 27 June that it will take legislative action to prevent ‘unfair’ fees.
The consultation seeks views on the nature and level of fees being charged to tenants. It seeks to determine which fees, if any, are justifiably being charged to tenants. It also seeks information on fees paid by landlords to agents, and on the consequence of banning fees.
The deadline for comments is 27 September 2017.
Research by the Association of Residential Letting Agents (ARLA Propertymark) shows beyond doubt that “legislation would ultimately cost tenants more,” said David Cox, ARLA Propertymark chief executive.