Specialist property accountant urges Hampshire landlords to prepare now to stay profitable amid fees overhaul
Hampshire landlords must prepare now for a possible ban on tenant fees that could significantly increase their costs, warns HWB’s Specialist Property Accountant Arthur Bell.
The government has published its Tenant Fees Bill which is set to overhaul the letting fees system and introduce a number of new rules that will affect landlords and letting agents. It comes as a government impact assessment has confirmed that the “main costs” will fall on landlords and agents, with landlords expected to absorb £82.9 million in the first year.
Arthur, who works with landlords and agents across the South, said careful financial planning will be vital in order to reduce the impact on the industry.
“This Bill will come as no surprise to any landlord or agent as the government had already nailed its colours to the mast in wishing to create a fairer playing field for tenants,” says Arthur, a Director of Southampton-based accountancy practice HWB.
“The new regulations, if passed, are largely to be welcomed as they will remove the chances of tenants having to paying excessively high fees, which I think everyone will agree does the property rental industry no favours in the long-run. However, any fees that are taken away from tenants will inevitably fall to landlords and they will have to be prepared for a possible financial hit.
“It is inevitable that some landlords may wish to review their arrangements with letting agents, but that will have to be carefully considered against the complex compliance needs which many landlords can struggle to navigate without assistance.
“Ahead of implementation, landlords would be advised to undertake a comprehensive review of their financial structures and processes and look at where savings can potentially be made in order to stay profitable.”
Among the proposed changes are:
- Banning letting fees.
- Capping tenant deposits at six weeks’ rent.
- Capping holding deposits at one-week rent.
- Creating a fine of £5,000 for those who breach the ban, making it a criminal offence with an overall maximum penalty of £30,000.
- Reducing the charges for a change in tenancy to £50.
For more information on the Tenant Fees Bill and how to mitigate the impact, call Arthur Bell on 023 8046 1205 or email email@example.com. View our property management services page for more details.