Government asked to consider cap on fees but all agents to pay levy on rental transactions

A consortium of independent letting agents has suggested to the Government a radical alternative to an outright ban on fees.
It is calling instead for a cap on fees charged to tenants as the equivalent of one week’s rent.
In addition it is proposing a mandatory levy – effectively a tax – on every new tenancy transaction.
The group of 11 firms, including Linley & Simpson, Morgans and Angus Roberts, suggests this would be between £15 and £25 on every transaction, paid by every agent across England.
The money would go into a central fund which the consortium of independent agents across Yorkshire believes would generate between £30m and £50m annually.
It suggests that the fund would be administered by existing tenancy deposit schemes, which would collect the money.
The money itself would go towards helping various homeless charities, and health and social care agencies, plus regulation of the lettings industry.
It names Shelter – a fierce opponent of letting agent fees charged to tenants – as a specific likely beneficiary.
The fund could also “make a significant financial contribution to ensuring the lettings industry is robustly regulated” and would pay for the infrastructure to ensure enforcement.
The group, making public its response to the consultation on the fees ban which closed on Friday, says that a fee ban would drive “certain market sectors further underground”.
The group warns that there would be an explosive growth of rogue agents, while ill-equipped landlords would attempt to self-manage their properties and tenancies.
This would result in a “wild west” crisis scenario, adversely affecting tenants.
The group also warns of “wide-scale redundancies” as letting and managing agents are “forced to make major cutbacks to survive”.
The consortium also says that a levy is not a new idea, citing several other schemes including the Community Infrastructure Levy which is paid by developers.

source http://blog.evolutionproperties.co.uk/2017/06/05/government-asked-to-consider-cap-on-fees-but-all-agents-to-pay-levy-on-rental-transactions/