8:12 AM, 24th November 2016, About 6 years ago 15
Letting agents who are arguing about the ban on charging fees to tenants are still failing to recognise this isn’t the biggest threat to their business.
Property118 “The Landlords Union” launched a survey of landlords within minutes of the Chancellor delivering his Autumn Statement. Nearly 500 landlords responded within 18 hours and the results are still coming in fast.
Initial findings are that 53% of landlords intend to sell rental properties as a consequence of there being no repeal of the legislation introduced by George Osborne to disallow mortgage interest as a legitimate business expense for private landlords only. The poll also shows that 81% of landlords are planning to increase rents to pay the additional tax or to fund the costs of restructuring the ownership of their business.
It is reduction in the supply of rental properties that will hit letting agents hardest, NOT their ability to pass on fees to landlords.
Extra commission earned from even higher rents caused by the tax changes might help to offset the loss of fee income for agents but it is the number of properties they will have available to rent which should be worrying them most. Agents also need to realise that scope for landlords to increase will also be under pressure from April 2017 when the passed removal of finance costs as a legitimate business expense is removed. Passing on extra costs to landlords issn’t really an option for agents as this will merely encourage landlords to shop around for better deals.
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