ARLA Calls for 6-Month Spread of Agent Fees

The Association of Residential Letting Agents (ARLA) is calling on the government to ban letting agent fees at the start of a tenancy, suggesting instead spreading the cost across the first six months as an affordable alternative to up front fees on tenancies.

New research from the ARLA has revealed that 62 per cent of letting agents expect that a full ban will cause the quality of rental properties to decline, whilst 61 per cent expect property management standards to drop. The research, which surveyed 1008 letting agents and examined the purpose of their fees and the effect a ban would have on the housing market, found that spreading fees will mean current service levels can be maintained.

It was also argued that spreading fees will ensure tenancies remain affordable, as tenants need only find the deposit and first months rent. Under the ARLA’s proposals, tenants would only pay fees over the first six months, and therefore would not be liable for extra costs when renewing a contract.

It was also asserted that landlords will benefit from keeping fees in place, as they will not face higher costs amidst the current onslaught of tightened regulation and tax rises they are facing. This will also prevent landlords raising rents, which currently seems a very likely solution to offset their costs.

Managing Director, Association of Residential Letting Agents (ARLA) David Cox, said: ‘When the Chancellor announced a full ban on letting agent fees in the Autumn Statement, we called the measure draconian and a crowd-pleaser. We stand by that. Nonetheless, we believe that ARLA’s proposal to spread the cost of the fees across the first six months of the tenancy will guard against the numerous unintended consequences of a full ban while also finding a solution that works best for the consumer.’

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