Government set to financially assault residential tenants in England


Government meddling in England’s housing market without any forethought is not without precedent. It is extremely difficult to cast your mind back 20 years and think of the name of any effective Minister for Housing, in fact they have all been highly ineffectual, which would lead us to conclude that this portfolio is a “Sword of Damacles”, so their tenure is always funnily enough very short. No wonder there is little grasp or understanding of issues surround the rental or sale of residential property in England by Government

So what is fundamentally wrong with the TENANTS FEES BAN, due to come in to force on June 1st 2019? :-

The simple answer is that Government did very very little to engage with industry professionals in order to understand the issues in relation to the charging of Tenants Fees by Letting Agents, so ironically their decision to crack a nut with a sledgehammer through this fees ban, will without any doubt whatsoever lead to higher rents having to be shouldered by tenants from the Summer of this year.
As we all know, it only takes one rogue to tar an entire profession with the proverbial brush that verges on criminality. Now I have a lot of time for the finely honed sales machine that is Foxtons in London, but their well documented treatment of tenants in simple lease renewal cases and the heinous costs they have inflicted upon them, that has led the firm down the road of high profile court proceedings, with Foxtons resoundingly losing. And so it is, with this tip of the iceberg being one such case amongst others involving other agencies, that we find ourselves with the subject rightfully thrust in to the spotlight.
Now cras behaviour by residential Lettings agents aside, there is a much bigger picture here that Government have completely ignored and it is they who created it in the first place.

Government encouraged us all as ordinary citizens to invest in residential property as a long term rental investment (in part as an effective constituent of a balanced portfolio of investments and in this sector there is of course both rental yield and over time capital growth, to gain advantage from) and more pertinently to the subject about which this article refers, they did this for good reasons, for they wanted to create a higher quality and volume of rented housing stock and by and large this has been a very effective exercise for both Government and for the individual investors.

Enter the professional intermediaries who rent and manage this burgeoning privately held rented housing stock, the Letting & Management agencies across England. For whom over the past 20 years (given major changes in legislation relating to this sector) the time they have to dedicate to tenants has become much more significant, not least Government using Lettings Agents as a proverbial arm of H M Customs & Excise, through the introduction of regulation in the form of Right To Rent checks. You may or may not be aware that Letting Agents are held criminally responsible if an ‘Alien’ is found to be renting a property in England, or if a qualified tenant decides to harbour an ‘Alien’ then the agent involved is still deemed criminally liable. We are however from 1st June 2019 not expected to charge tenants nominal fees to be qualified for entry to someone’s privately held rental investment. ALL professions bill for their time, so there is clearly an anomaly here somewhere.

Government, in not holding sufficient dialogue with the Lettings & Management profession have entirely overlooked the fact that the charging model in the industry has changed significantly over the past decade. Whereas a landlord would pay upwards of 15% for a fully managed service, this is no longer the case. Professionals have to charge fees for the work that they undertake, otherwise they render themselves a charity or bankrupt, for there are naturally overheads relating to the increased workload that has to be undertaken with tenants. Tenants are also consumers and they like all consumers these days are demanding of your professional time and have much greater rights.

I’m not just having a rant here as the owner of a Lettings & Management business, for I know that there were firms, such as Foxtons in London and I’m sure many others who were abusing the lack of regulation. However, regulation was the rational way forward so that businesses like mine in this sector can continue to invest in ARLA qualified staff to handle tenants affairs professionally, whereas the outright fees ban raises the spectre of circa 4,000 redundancies in the industry - Not a whisper of which has been mentioned in the press, whereas this volume of job losses in say the steel or automotive industry sector would be front page news.

Most tellingly, as a professional in the industry I attended the ‘TENANTS FEES BAN’ debate in the ‘Debating Chamber’ of The Houses Of Parliament’ proposed by The
Rt Honourable Kevin Hollinrake MP in September 2017. It became very obvious during that debate, which involved representatives from all sides of the house, that the whole subject boiled critically down to either “social” tenants renting in the Private Sector or those (low income) tenants at the bottom of the affordability ladder, who can not afford to pay additional fees to Letting Agents in order to gain entry to a rented property. It really did not apply in the slightest to the rental market as a whole.

So the legislative solution to this should have resoundingly been the CAPPING OF TENANTS FEES in order to prevent rogue Letting Agents from charging tenants inordinate fees and for those tenants for whom this debate is critically about (this important factor having been lost in the noise), on low incomes (below a prescribed level) or “social” tenants, there should quite rightly be no fee applied at all by Letting Agents.

In parliamentary circles this subject almost descended in to farce, for it had been proposed that security deposits were to be banned also - They have in fact been marginally reduced, which is a farce in itself, because it is tinkering at the edges and tenants should have to put down sufficient security deposit as a preventive device in ensuring that they look after the property that they are about to occupy. If you are a first time buyer, you have to show at least some sign of financial responsibility by saving for a deposit to put down on your intended purchase (we all know the disaster that unfurled at the height of the 100% mortgage lending era!), so why, aside from the poor or those on low incomes who I firmly agree should be protected by regulation, are we descending in to an era where people renting property will have no financial “skin in the game” at all, so therefore they will have nothing to lose?

All of this whilst Government have decided to penalise private Landlords through tax rises and reductions in tax breaks for expenses incurred in rental property ownership,
when they had encouraged investment by ordinary individuals in the private rented sector in the first place.

This is the distasteful face of Government bowing to the onset of populism, so seeking the “low hanging fruit” as a vote winning device, as opposed to applying common sense. Is it any wonder that politics is in such a parlous state in the UK.

If you are a Landlord in Oxford or wider Oxfordshire and you are seeking a Letting Agent who will act in your best interests in this ‘new age’ of rental property ownership, then do call WEST-The Property Consultancy on 01865 510000, or email our Head of Letting & Investment, Gareth Gould at

Article by: Gavin West
Managing Director
WEST-The Property Consultancy