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The Queens Speech

22nd Jun 2017

Tagged: Legislation, Deposits, Letting Fees

The queens speech marks the start of the new parliamentary term. In what is considered a speech thin on policy there are still some changes in the pipeline that will impact the property industry.

The queens speech has been criticised by the opposition as being light on ideas and legislation.  Perhaps this is demonstrative of the much weakened state of the government and a telling hint towards the way in which parliament will have to act over the next few years. 

That being said, there are still proposals in the speech which will impact the lettings industry. Some were expected and some were most certainly not:

i) A commitment to ban letting fees by Agents and Landlords

While not yet law and despite the consultation only recently having closed the much anticipated ban on fees is set to proceed. Agents should have been aware of the changes for some time and the ban shouldn't come as a surprise. 

ii) Security Deposits capped at 1 months rent

We didn't see this specific change coming although in a drive to improve perceived affordability it's easy to justify.  The reality is that most tenancies pass without a significant claim on deposit.  A greater degree of engagement with tenants by agents is paramount to catch potential issues early and open the  dialogue between tenant and landlord before the end of the tenancy. 

iii) Holding Deposits capped at one week

Again, another blindside but one that should be manageable with strong relationship and trust building between parties.

Comfort Opinion

A mixed bag, some we foresaw some we didn't but all the proposals are manageable for agents who take the time to understand the needs of landlords and tenants.  Early engagement and strong relationship building by agents and landlords alike are evermore important as the blunt tool of a holding and damage deposit is capped.  

Ben Harrington

Comfort Partner

An experienced Chartered Accountant and Founding Partner of Comfort Lettings.

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