A director at Isle Of Dogs estate agency Johns And Co has criticised the Chancellor’s ban of charging tenants lettings agency fees, calling for tougher regulation instead.
Residential director Clynton Nel said the company was “surprised” at the announcement by Philip Hammond during the Autumn Statement.
Clynton said: “There are some fairly strong views, obviously, in terms of what agencies should be charging tenants.
“We have always said we support regulation of agencies and that would temper the issues to some degree. It could be by capping fees for tenants, for example.
“But certainly not an outright ban. I think that’s a hell of step and I think it’s a bit of a crowd-pleaser. I’m not convinced it was a well-thought out plan in terms of what that looks like to the industry as a whole and also to tenants and landlords.
“They’ve been dealt a few harsh blows in the last few quarters. It will be interesting to see the detail, it’s very sketchy at the moment. There are a few bits and bobs that need to be ironed out in the consultation period.”
He said the company has always been of the opinion that there are agencies out there that exploit tenants in the way they charged their fees.
And, like many others, he predicted that charges could just be passed on to the landlords, who in turn pass it back onto the tenants through raising rent prices.
“Do I think agencies will pass it on? I think some will,” Clynton said. “Some will perhaps develop ways of spreading that cost out or filing it in a different way, shape or form.
“If there is a total ban then I think people will be squeezed on both sides.”
“The sooner we get more regulation, the sooner we’ll root out rogue landlords, rogue agents and that’s what the industry needs.”
Clynton, who has experience of high charges when he used to rent properties, sympathised with many tenants who have to come up with the fees alongside a “chunky deposit” and rent in advance.
He said: “They’re all aspiring property owners but that’s a hell of a stretch for them at the moment so they’re forced to rent.”
Asked whether it would cause further uneasiness in the post-Brexit vote housing sector, he said: “I think it brings some uncertainty from a landlord or investment point of view.
“It might throw up a bunch of questions and cause uncertainty in terms of entering that market or staying in that market.”
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