Many letting agents may stop providing tenant referencing for former renters after the fees ban goes live tomorrow in a bid to cut costs.
The claim is made by the National Landlords Association (NLA), which says it has found that many agents are planning to cut down their workload to a ‘bare minimum’ in order to cut costs from next week onwards.
“The smooth running of the housing market requires a little give-and-take, and unfortunately the reaction of some letting agents to the ban looks set to throw-up more barriers to moving from one tenancy to another,” says Richard Lambert, CEO of the NLA (left).
Most letting agents have been happy to provide landlords and other letting agents with tenant referencing for former renters but the NLA claims many will no longer be willing to provide them.
This will also mean landlords may be breaking the terms of their local selective licensing schemes, many of which require landlords to complete tenant referencing before tenants move in.
“While landlords who self-manage their portfolios will be covering many increases in cost, letting agents are looking at any way they can limit what they have to do on behalf of tenants, now that the costs cannot be directly recovered,” says Lambert.
“Just like private landlords, letting agency businesses are being put under increasing pressure by government regulation.
“However, they must realise that penalising outgoing tenants by refusing to provide references will ultimately cost them more than just the price of a reference as landlords opt to do without agents altogether.”