Letting agents in England will be banned from charging fees to tenants under a policy announced in the Autumn Statement.
Tenants moving into a new house can be charged numerous fees from referencing to credit checks and ‘administration’ fees.
“Letting agents are currently able to charge unregulated fees to tenants, often of hundreds of pounds,” says Hammond.
“We have seen these fees spiral despite attempts to regulate them.
I can announce today that we will ban fees to tenants as soon as possible.”
Letting fees have already been banned in Scotland.
OneSavings Bank sales and marketing director John Eastgate says letting fees have “inflated beyond reason in certain parts of the country”, and welcomed the policy.
However, he says “renters will inevitably pay for the further cost on landlords through increased rents.”
UK Association of Letting Agents executive director Richard Price says the policy is not the correct way to address affordability issues in the private rented sector.
“A ban on agent fees may prevent tenants from receiving a bill at the start of the tenancy, but the unavoidable outcome will be an increase in the proportion of costs which will be met by landlords, which in turn will be passed on to tenants through higher rents,” says Price.
“UKALA agents strive to provide a premium service which represents excellent value for money and this ban will place in jeopardy hundreds of professional businesses in order to deal with the few unscrupulous”.
Fleet Mortgages chief executive Bob Young says, however, that landlords will be able to offset letting charges against tax.
“I’m not completely convinced these measures will result in an increase in rents as typically landlords charge what the market will take and that may not allow an increase,” he says.