The Scottish Housing Minister has said that his government intends to ban landlords and agents from charging fees to tenants. Landlords north of the border will not be able to charge for items like inventories, reference and credit checks. This will introduce a major change in the way the market operates because the only payments the landlord or his or her agent will be able to take will be the rent and the refundable deposit.
There has been a very active campaign against fees by Shelter and other groups and the Government held a consultation process which has resulted in the proposal to amend the law, probably later this year. Payments that have already been taken will probably not be effected by the new rules which will not be retrospective. Landlord insurance clients with properties in Scotland will have to review their budgets and cash flow plans to reflect the additional expense of credit checks, inventories and so on. It would obviously be unwise to stop doing these checks and since they cost money, someone has to pay for them. Since the tenant can no longer be asked to do so it will fall to the landlord or agent. Either way, the effect is likely to be upward pressure on rents. Even if agents decide to finance the fees they will surely need to recoup this from increased management fees so the landlord will see a reduction in income that may need to be covered by a rent increase.
There is no doubt that some unscrupulous buy to let landlords and their agents have abused their positions by imposing unreasonable charges on tenants. Unfortunately, the bad behaviour of the minority has led to all landlords, good and bad having to comply with new restrictions on the way they do business.