THE number of Buy-to-Let landlords who have sold up since the three per cent surcharge on the purchase of investment properties was imposed by the government in 2016 is estimated at 120,000, the head of research for Hamptons International, Aneisha Beveridge told the Bucks Free Press this week.

Letting agents fear the Tenancy Fees Act introduced next month will be seen as a further disincentive by private sector landlords.

As from June 1 agents and landlords will not be allowed to charge tenants for the necessary reference check when they move in.

Other charges which can’t be passed on to tenants in future are the agents’ fee to cover administration costs at the start of a tenancy and the inventory check at the end of their stay.

Although details of the forthcoming legislation have been in the news for months it’s only now with a fortnight to go before the changes are implemented that many property owners are waking up to the financial implications.

This week one of the most experienced letting agents in the county told the Bucks Free Press he got short shrift from a long term client when he explained how the tenant fees ban would affect him next time there was a change of tenant at his property.

He said: “His immediate reaction was ‘What are the government up to?’ His next question was to ask if I would consider adjusting my fee. I said I couldn’t do that.

“These new regulations have come about as a result of a few bad eggs in the letting industry who have bumped up fees for services they provide. We’ve never done that. All costs passed on to tenants by our company are verifiable.”

Under the new rules, up front security deposits will be capped at the equivalent of five weeks’ rent for an assured shorthold tenancy at a property where the annual rent amounts to no more than £50,000. Above that, the up front deposit will be equal to six weeks’ rent.

A letter sent to landlords in the past month from the letting department of an independent agency in the Bucks/Herts area sets out in plain English how the changes will affect property owners.

The letter seen by the BFP draws attention to a problem which could drive many to consider a change of strategy. The agents point out: “There are circumstances when a landlord will demand a higher security deposit from tenants with pets. However under the new legislation this will not be permitted. It has been suggested that as an alternative, the property is advertised at two rental levels – a higher rate for a tenant with pets.

“With regard to holding deposits taken to secure a property once an offer has been accepted and references are taken up, these [will be] capped at one week’s rent which can only be held for 15 days.

“There are four circumstances under which a landlord can retain a holding deposit: if the applicants pull out before the tenancy is signed, if they fail the right-to-rent check meaning they are not legally permitted to rent in the UK, if they are shown to have given false information or they are time wasters – ie they fail to provide the necessary details for a reference check within the 15 day time frame.”

According to HomeLet rents in the UK are rising at their fastest rate for more than two years. In the 12 months to March they increased 3.3 per cent.

The Royal Institution of Chartered Surveyors forecasts the growing imbalance of supply and demand will result in a further three per cent hike by 2024.

Pictured is a three-bedroom two-bathroom country cottage next door to one of the oldest pubs in the UK, The Royal Standard at Forty Green. The house is coming onto the books of the letting department at the Beaconsfield office of Tim Russ. This semi rural idyll with lovely views over countryside less than ten minutes drive from Beaconsfield shops and station could be all yours for £2,380 a month.