tenant fee ban
14th June 2019 by Property Deal Store Administrator in Development, Investors

Tenant Fee Ban Comes Into Force

Earlier this year we informed you that from 1st June 2019, landlords and their agents will no longer be able to charge their tenants, or prospective tenants, administration fees.

You can read all about it here:

Tenant Fee Ban – All You Need to Know

Tenants: here are the basics

The tenant fee ban is now in force. Meaning, as a tenant you can’t be charged certain fees – most noticeably around the application process.

Of course, there are some fairly obvious exceptions. Holding deposits, standard deposits and rent can still be charged, as can services that are included with the tenancy, such as energy and council tax.

Landlords haven’t lost certain protections either. They can still claim compensation for things like late payments and lost keys, as long as these fees are reasonable.

Most landlords and agents though, will still see this as a loss of income. And whether it’s fair that this income stream has been removed or not, there could be a knock-on effect for you as a prospective tenant…

Landlords could increase rents to fill the void.

Landlords: what’s your next move?

This isn’t the only fundamental change affecting your finances as a landlord in recent times.

Section 24 or the ‘Tenant Tax’ has been having a large impact on landlords who finance their properties since its introduction in 2017 and it will continue to affect more and more of you until its phased introduction completes in 2020.

Section 21, the tenant eviction process, is also set to be reformed.

Needless to say, times aren’t getting any easier for landlords.

But as we like to say at Property Deal Store, there’s always opportunity hidden in the chaos. This isn’t any different.

If you’re running a professional, reputable property business there will always be a market for good quality, well-priced rental accommodation aimed at reliable and trustworthy tenants. Tenants that shouldn’t be charged excessive fees to then be told they’ve not been successful.

Less-scrupulous investors offering poor accommodation and overcharging vulnerable tenants will be cracked down on, leaving more deals on the table for investors like you and us.

So, how to move forward?

As always, we would suggest speaking to your advisors and considering how you will need to amend your practices when it comes to tenant fees.

If you’re using an agent, they can no longer charge tenants for carrying out reference checks so the charges may be passed on to you. Check how your agreement with them will be affected.

You could decide to background-check tenants yourself. You can ask them to provide references, bank statements and other proofs of income before making your decision to let to them.

How we can help

If you’re looking to continue building your portfolio, as long as you’re finding great deals and doing a good job, opportunity will always be there. Good tenants will also pay a bit more for the right property so if you do need to increase rents slightly, this shouldn’t present a problem if the property is of a good standard.

First of all, though, the deal needs to be right. And that’s where we come in…

Property Deal Store is the place that connects the property sourcer to the property investor. Property deals are negotiated and packaged by property sourcers and then published on the website for purchase by the property investors.

This is the platform the industry has been crying out for and we have created this website with a clear mission in mind: To be the go-to platform for investors to build a successful property portfolio whilst facilitating the development of a successful career in property sourcing for our sourcers.

It’s win-win.

Best of all, you can just go ahead and check out the latest deals right now. You can also register for free to keep up with all things property, such as regulatory changes like this.

As part of your membership benefits you will also get access to a whole host of resources designed to help you achieve success in property.

There’s truly nothing to lose. Register here.

 

– Janice Minihan, director and co-founder of Property Deal Store