Scotland Bans Tenant Fees from November

04 September 2012 Categories: News

Scotland Bans Tenant Fees from November

In a bold move the Scottish Government has made the decision to ban all tenant fees from November 2012, a move that could put a lot of smaller letting agents and some landlords out of business. The fees in question include referencing fees, credit check fees and inventory fees, which means tenants can no longer be asked to pay anything more than their rent and a refundable deposit for a tenancy to be granted.

The change in the law will benefit thousands of Scottish tenants, and especially those who move home on a regular basis, but for landlords and letting agents it simply means more expense that needs to be recouped from other sources i.e. the rent.

Managing Director of Martin & Co, Ian Wilson, believes that it is landlords who will bear the brunt of the changes as letting agents increase their landlord fees to compensate for the loss of tenant fees. He commented, “We reckon that a 5 percent across the board rent increase would recover the lost income for landlords, working on the basis that agents pass on 100 percent of the cost increase they face.”

Mr Wilson also believes that success of the scheme in Scotland could result in it spreading across the border into England and Wales.