The Welsh Assembly is being urged to reconsider the bill to ban tenants’ fees in Wales due to concerns that that it will have an adverse impact on the rental market in the principality.
The National Landlords Association (NLA) fear that if the fees charged to tenants by letting agents are banned, these costs will be passed on to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents.
Giving evidence to the Welsh Assembly on Renting Homes (Fees etc.) (Wales) Bill, and the potential impact it will have on private landlords, Chris Norris, NLA director of policy and practice, argued that the proposed changes would lead to an increase in costs for landlords.
He also questioned the extent to which the Bill would achieve its intended aims, referring to his earlier statement on the Bill when it was introduced by Welsh housing minister, Rebecca Evans AM, last month.
He said in his official statement: “Whilst tenants and applicants deserve to be treated fairly, and not unduly charged, it is disappointing that the Welsh government seem to be adding to the enormous amount of change with which landlords in Wales are being expected to contend.
“With all of the uncertainty surrounding the introduction of the new ‘Standard Contract’ from 2019, and ongoing debate about fitness for habitation in the private sector the NLA would like to see the Welsh government focus on getting the fundamentals right before moving onto new challenges.”
Norris accepted that 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.
However, he argued that there are some charges that tenants should be responsible for which both the landlord and the tenant are beneficiaries’ – avoiding pre-screening, referencing, and particularly checking-in – and where there’s a risk of harm for both parties if the process is not followed properly through poor service “there’s an argument for sharing that cost”.
He also said that there needs to be “a true understanding of who are the beneficiaries of different services, and therefore the costs are met by the people who are benefiting”.
The Bill proposes holding deposits are capped at just one week’s rent. But the NLA does not believe there should be a cap.
Norris explained: “The security deposit never becomes the landlord’s money. The security deposit always remains the tenant’s money. The legislation already protects that.
“It’s not in the landlord’s interest, or the agent’s interest, to ramp up the security deposit that they can’t use as operating capital, because it becomes a barrier to getting people in the homes.”