Two senior figures within the lettings industry have said that the tenant fees ban announced by Philip Hammond in his Autumn statement is likely to make life more difficult for tenants, not easier.
Martin Totty, CEO of HomeLet (pictured, left) and David Cox, MD of ARLA (pictured below), both told The Negotiator that they expect tenants to be asked for – and pay the costs of – providing their own references if a full ban is implemented.
Totty, who heads up the UK’s largest referencing agency, says that while there is now uncertainty about what might happen to referencing after agents and landlords are prevented from passing on their cost to tenants, if this does happen renters should not “assume referencing is no longer their liability” if they want to secure a property.
“This would be an unfortunate [and] unintended consequence of the announcement contained in the Autumn Statement,” he says.
David Cox agrees, saying that if referencing agencies such as HomeLet are forced to find alternative business models, these companies will turn to tenants to pay the cost of checking their financial and rental track records.
Cox says that if a full ban is introduced he believes agents will ask tenants for references during the sign-up process and then make it clear to them that it is their responsibility to supply – and pay – for them.
“I think the referencing agencies need to start thinking about what they are going to do if it’s an outright ban. But it’s too early to tell,” he says.