As part of the ARLA Propertymark Tenant Fees campaign that you will already be aware of, we have commissioned evidence from leading research consultancy, Capital Economics. The report examines the likely economic impact of the ban alongside evidence from the ban in Scotland and fees charged in other sectors.
The research shows that the residential lettings sector turns over around £4billion per year and employs some 58,000 workers with average fees to tenants of £412 for two people or £206 per person, considerably lower than those paid by tenants in France or the USA.
The research shows that fees charged to tenants generate around £700 million per year or approximately 20% of the industry's turnover. Capital Economics predict that if an outright ban is enacted, the most plausible outcome for the market is that agents will lose £200 million in turnover, 4,000 jobs will be lost in the sector, landlords will lose £300 million in income, and tenants will pay an increased rent of £103 per year.
Most tellingly, the research goes on to outline damning, unintended consequences of the government's policy including the projection that only tenants who move regularly will benefit from the ban - those who stay in a property for longer periods are likely to experience increased rents:
"Although renters will benefit from a reduction in up-front fees, most of this will be passed back to them through increased rents; those tenants who move more frequently will enjoy a saving on overall costs but those who do so less frequently (which are likely to be lower income families) will see a loss.
"The letting fees ban favours those tenants who move more regularly. This is because both short term tenants and long term tenants (who move less frequently) will see a rise in rent equivalent to £103 per year under our plausible outcome. However those that move more often will now save more compared to previously."
A policy which is designed to save tenants' money will actually hurt lower income families who will probably move less often than younger, wealthier millennials. this is hardly a policy which "Works for Everyone".