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.
ENDS