Neil Cobbold: Lack of information on how Tenant Fees Bill be implemented
Neil Cobbold, chief operating officer of PayProp, has criticised the government for a lack of information on the implementation of the Tenant Fees Bill and for not introducing tax breaks for landlords offering long-term tenancies in Chancellor Philip Hammond’s Autumn Budget.
The ban on upfront fees charged to tenants was first proposed by Hammond almost two years ago, along with a cap on security and holding deposits.
Cobbold said: “Given the length of time that has passed, it’s crucial that letting agents, landlords and tenants get more information about when and how it will be implemented.
“Next year is set to be a crucial year for letting agents – now that they have more clarity, they can plan accordingly.The Bill will pose a challenge for letting agents, but they must try to take the positives out of the situation.
“The fees ban will force agents to look for alternative revenue streams and streamline processes using technology. Over time, the best agents will become more profitable and work to a more slick and efficient business model than ever before
“This would have been a welcome move by the government as it would have allowed landlords and tenants who want to pursue longer tenancy agreements to do so without making it a mandatory requirement for the entire PRS.”
He said industry research shows that mandatory longer tenancies may cause some landlords to exit the sector, and that not all tenants are looking for long-term agreements.
Cobbold added: “However, for many landlords a capital gains tax break would be a timely incentive to continue to provide much-needed rental housing stock.
“Such a policy could have provided vital feedback to the government’s previously announced plans to introduce mandatory three-year tenancies, indicating whether long-term tenancies are needed or if they should remain an optional decision rewarded with a tax break.”