Save £404 when you move after fees ban

Tomorrow is the final chance to respond to the government's consultation on their proposals to ban letting fees.

Ahead of this we have published our latest research from lettingfees.co.uk, which features in today's Times (£), Guardian and i. We have also published an update to last year's report.

Our main findings are that the government's proposals will save the average tenants £404 when they move, and an average £117 every 6 or 12 months to renew the tenancy.

However, there is still a lot of leeway for the ban to fail in improving things for renters. The proposals are unclear about whether check out fees and services like repairs will be covered by the ban, or exempt. 

From what we know about letting agents - 7 of the country's 8 biggest chains charge more than the average - many will use any chink in the ban's remit to shake down tenants for their hard-earned cash. If they can't charge £600 at the start, they'll charge £600 if you want to move out.

That's why we need a blanket ban, with no exemptions. 

And from what we know about the enforcement of existing laws - 12% of agents don't publish their fees online - overstretched councils can't be relied on to police a ban effectively. 

Renters should be given protections and eligibility for compensation if their agent tries to charge them any fees. This already happens with tenancy deposits. If yours isn't protected, your landlord is on the hook for three times its value, payable to you.

Hundreds of our supporters have responded to the consultation and we've been sharing some of their stories on social media, using #keysnotfees.

It is clear that the ban on fees will give many of them the freedom to move out of unsuitable homes, negotiate a better rent and not go into debt when they're forced to move home. 

Given the industrial-scale rip-off that letting fees clearly are, it is astonishing that the lettings industry hasn't held up its hands and said "fair cop guv". 

No, they are so desperate to fight this that they have resorted to making up statistics. The Association of Residential Letting Agents (ARLA) commissioned Capital Economics to work out the effect of the ban on rents. Assuming that the whole cost would not be passed on to the tenant they came up with a figure of £103 a year (using our comparison figures for a two-adult household, which is obviously very flattering). What they then immediately say (page 47) is: "As rents will increase by less than the average tenant fees this will be positive for tenants."

They make a further argument that after a number of years the effects of this rise will start to outweigh the savings - but this is based in part on a maths error and by ignoring the role of renewal fees in costs to tenants. When the effect of renewal fees is accounted for, even accepting for a moment the rent rise is accurate, tenants get more money back even for quite long tenancies. This is explored in more detail in our latest report.

The Guardian asked David Cox, chief executive of ARLA, to respond to our figures, and he said, "Research commissioned by ARLA Propertymark carried out by Capital Economics demonstrated that if a full ban comes into force, two tenants will end up paying an extra £206 per year in rent."

This shows he has misunderstood the figures he commissioned, as this is double what Capital Economics actually claim (the rent rise is not per tenant). ARLA is quite happy with a “rent rise” soundbite but for some reason never follows up with the "as rents will increase by less than the average tenant fees this will be positive for tenants" quote from the research they commissioned.

I wonder why that might be.

There's still time to respond to the consultation - the deadline is Friday 2 June.

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