London drops tenants fees
Good news at last for London residents, particularly the huge amount of people who simply cannot afford to buy. The government has announced a ban on all real estate companies from charging tenants renting one off fees. This has hit the stock prices of major agencies hard, with Foxtons losing 11% the same day the new law was announced.
Renting in London has always been extortionate but in the past few years has spiralled out of control, whilst companies such as Foxtons, continue to make vast amounts of profit. More and more people are having to live outside the City, with their parents or in squalid bedsits just to live in the City. Rises in rental costs in London have in recent years been more than twice the rate of inflation meaning young, talented people simply cannot live there. What this means in the long term for the economy is yet to be seen. Recent governments have continued to promise affordable housing and have failed. Some might say they have not made any significant changes whatsoever.
Philip Hammond, finance minister, announced the fee ban. This follows the recent tax increase buy to let landlords. They have also said they will give the Bank of England authority to limit the tax relief available to housing landlords. About time too, but is it enough? Industry experts are sceptical with David Cox Managing Director of the Association of Residential Letting Agents suggesting "This decision is a crowd-pleaser, which will not help renters in the long-term,"
Let’s hope Mr Hammond sticks with these promises and gives the Bank of England proper regulatory powers, as most Londoners will agree landlords and real estate companies have had it too easy, for too long.