REINZ warns letting fee ban could lead to rent increases
REINZ warns letting fee ban could lead to rent increases for tenants
Following the announcement from Parliament that it has voted to ban the landlords from charging tenants for letting fees, REINZ warns that this might lead to an increase in rental prices in the long run.
In its submission to the Select Committee REINZ, alongside other similar industry bodies, outlined that while banning letting fees will reduce fees upfront, that long term those fees may simply be recuperated by landlords through increased rent which contradicts the purpose of the ban, which is to reduce costs and improve fairness for tenants.
Bindi Norwell, Chief Executive at REINZ says: “Whilst banning landlords from charging tenants letting fees might help them in the short term, in the long run it’s likely that these costs may be passed on to tenants via an increase in weekly rent. REINZ, alongside other similar industry bodies, outlined this point in our submission to the Select Committee.
“Additionally, our concern is that it may make tenants with shorter term tenancy requirements, such as students or seasonal workers, less attractive to landlords making it harder for them to obtain rental accommodation.
“Given the current raft of legislation being directed at landlords, this may contribute to landlords’ decision making to exit the rental market further reducing the available pool of rental properties and driving up prices. This has been highlighted by a number of property managers across the country now and we continue to call for a balanced approach to avoid harming the rental market in the long term,” continues Norwell.
“We’ve said this before, but we think a better way to look after renters is to regulate the property management industry rather than focusing on smaller issues such as banning letting fees. We don’t want New Zealand to continue to be an outlier – instead we need to follow the good example set up countries including Australia, the UK, Republic of Ireland, the USA and Canada and ensure that our property market is regulated. This is one of the key ways we can ensure that we’re improving the lives of renters,” concludes Norwell.