Blog: Scotland’s experience of abolishing letting agent fees
Rosemary Brotchie, policy and research manager for Shelter Scotland, shares Scotland’s experience of abolishing letting agent fees as England plans to do the same.
The Chancellor’s Autumn Statement yesterday has brought some good news for tenants across England, with the announcement that the UK Government will be banning letting agents from charging fees to tenants. Our colleagues in England have been campaigning for this since 2013, and there is overwhelming evidence of the impact that these fees have had on hard pressed renters.
Here in Scotland, the Scottish Government took this step in November 2012, and legislated to clarify the law around letting agents charging fees to tenants. The charging of premiums by landlords or agents (otherwise known as fees) has been illegal in Scotland since 1984, but it took the clarification of this law in 2012 to ensure that agents across Scotland stopped charging tenants.
On the whole, the move has been a positive success for Scottish private renters. Independent research conducted for Shelter in 2014 showed that renters, landlords and the industry as a whole has benefited from banning fees to renters in Scotland. It found that any negative side-effects of clarifying the ban on fees to renters in Scotland have been minimal for letting agencies, landlords and renters, and the sector remains healthy.
Many industry insiders had predicted that abolishing fees would impact on rents for tenants, but our research show that this hasn’t been the case. The evidence showed that landlords in Scotland were no more likely to have increased rents since 2012 than landlords elsewhere in the UK. It found that where rents had risen more in Scotland than in other comparable parts of the UK in 2013, it was explained by economic factors and not related to the clarification of the law on letting fees.
Of course, there are a few agents who have taken longer than they should in changing their business models, and a few who think that they can still get away with charging fees. Shelter Scotland continue to support tenants who need to reclaim fees charged illegally, and Trading Standards teams across Scotland are focusing agents who think that they can flout the law.
Banning fees for agents in Scotland has led to a greater focus on improving professionalism and standards in the sector. Letting agents are a vital element of the rental sector in Scotland and Shelter Scotland is soon to begin working closely with letting agents who rent property to tenants who need extra help to sustain their tenancies. Our aim is to encourage the good practice that is already out there, and break down many of the barriers that letting agents encounter when they seek support to help their tenants stay in their homes.
- Rosemary Brotchie is policy and research manager at Shelter Scotland