As of the 1st September 2019, Wales is also banning tenants fees and is capping holding deposits to the equivalent of 1 weeks rent… this comes into force under the Renting Homes (Fees etc) (Wales) Bill.
This follows England and Scotland who are also getting rid of Tenants Fees and capping deposits at 5 weeks rent as of the 1st June 2019.
The whole idea is to make it cheaper for tenants to rent property, therefore lowering the barrier to entry and making it more accessible… which is a great thing, because the more tenants who are able to rent the more demand for properties.
And you know what increased demand creates… price rises!
Couple this with the fact that Landlords are already up in arms about the removal of Section 21 notices, the increased responsibility under the Homes (Fitness for Human Habitation) Bill 2018 and the changes to mortgage interest rate relief… there’s going to be an awful lot of Landlords who can’t ‘cope’ with this, disposing of their properties, so supply will dwindle.
I’m not quite sure that this is what the Government were after. But the fact that tenants have to save less to take on a tenancy agreement, only means that they will be able to afford higher rent.
How should you be preparing for these changes:
1. Speak to your letting agent and find out if you now have to pay the fees, if you do then you must move on to 2…
2. Assess the market, if rents have gone up, it’s time to put your rent up too to cover the cost of fees
3. With deposits now lower, you are going to need to take out Landlords Insurance to cover any damage or loss of rent
4. Credit check your tenants and make sure they can afford the rent they are offering… it’s easy to take a high rent thinking ‘oh wow this is excellent’ and then actually find out they could only pay month one and now you have to go through the eviction process. There’s nothing stopping you putting a guarantor in place if the tenant isn’t financially stable, make sure you protect yourself!
These changes are coming… nows the time to take action!
Are your letting agents going to be charging you the fees now? Are you putting your rent up?
Let me know in the comments section below, and remember to subscribe to the Newsletter so that you get the best updates every week, straight to your inbox!