The likely results of a letting fees ban for tenants and agents have been spelled out by the National Approved Lettings Scheme (NALS) in a briefing document produced by its Fair Fees Forum for the Department of Communities and Local Government.

As well as highlighting how poor policing of a letting fees ban would lead to an unfair advantage for those who did not comply with the ban, the Fair Fees Forum says there will be “a number of serious disadvantages for tenants”.

These include:

• Rents will rise as landlords seek to recoup the costs of referencing, deposit administration and inventories.
• The practice of high ‘month one rents’ in lieu of fees will increase.
• Block viewings rather than individual accompanied viewings will become the norm.
• Tenancy negotiations will need to simpler and more streamlined and less tailored.
• Tenants will have to provide their own references plus a lot of the information currently gathered by letting agents.
• Less help for tenants when Right to Rent enquiries become complicated or with utility bill and transfer problems.
• Property standards may fall as landlords do fewer repairs or refurbish properties less often.

The Fair Fees Forum also makes the point that banning fees may lead to fewer letting agents, and also more landlords self-managing their property, thus taking many private rented sector properties away from the hands of agents – who are more regulated than landlords.

“Finally, small landlords may simply quit the market when faced with the burden of adsorbing costs previously met by tenants, coupled with changes in SDLT and Mortgage Interest Relief,” the Fair Fees Forum document says.

The Forum paints a gloomy picture for agents after the ban comes in, predicting that agents will be unable to maintain investment in staff training and developments, that many agents will downsize or de-skill teams. It also says more people will complain about agents and that healthy competition between agents will decrease – something that it says is already taking place.

The Forum also says that a fees ban will lead to house-hunting tenants making multiple offers on properties, leading to “increased costs for landlords and agents through abortive and additional work”, it says.