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Regulation & Law

Tenant fees ban will spark tenant referencing crisis, say landlords

NLA claims many letting agents are planning to stop providing references for former tenants to landlords and other agencies in a bid to cut costs.

Nigel Lewis

tenant referencing

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.

Richard Lambert tenant referencing“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.

Tenant referencing

“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.”

 

May 31, 2019

2 comments

  1. And who can blame then? The government is trying to turn letting agencies into a charity.

    We used to do them for free whilst others charged, we used to do many things for free for tenants, but seeing as the government has decided that all letting agents are bad and tenants good, they can forget it. Our new criteria is now simple – no referencing, both fully employed, no pets, no bens, no hassle – simple. If tenants don’t like, blame themselves and the government.

  2. This is really interesting, but not surprising. As a referencing company, we have already taken steps to ensure that this possible reluctance in obtaining current/previous referencing reports from agents has been covered. Running an enhanced referencing programme for many of our clients, which includes reaching out to an applicant for a copy of their tenancy agreement and rental payment evidence (and evidence of the amount of deposit returned, if already vacated), this process will be rolled out to any case where a rental reference is refused. By obtaining and assessing these documents, we can build up a much clearer picture of how the tenancy is running and whether any late payments have been incurred. Sadly, it won’t give us a dilapidation check, but many current tenancy references are given on the understanding no check out inspection has been undertaken at that point. By obtaining these paper proofs, we can also check that the applicants previous address (as listed on their TA) has been disclosed and credit checked too. For more information about this service, just email Vivienne.nelson@reference-my-tenant.com.

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