Renters looking for short-term tenancies might struggle to find willing landlords under Labour's proposed changes, a property expert has warned.
Labour on Sunday revealed its plans to help the half of the country now renting, including increasing the notice period landlords have to give to kick tenants out, limiting rent increases to once a year and banning property managers from charging tenants a letting fee.
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While the Citizens Advice Bureau says a letting fee should be no more than a week's rent, there is no limit. Paying it can be a struggle for tenants already faced with coming up with several weeks' bond and the cost of moving house.
Real estate veteran Leonie Freeman told The AM Show on Monday while Labour's proposal contains "some really positive ideas", there could be collateral damage.
"It will have an impact on people wanting short-term tenancies. If the landlord has to pay the letting fee... then they will want long-term commitments by tenants."
She says Labour won't abolish letting fees entirely, instead adopting the Australian model, where property managers bill the landlord for the cost of finding a new tenant, instead of the tenant.
The upshot of this will be landlords will ask their property managers not to bother with short-term leases.
"That's what drives a lot of the fixed-term tenure contracts in Australia - it will eliminate a lot of opportunities for short-term tenancies."
Real estate and property management company First National said if tenants aren't charged letting fees, they'll just have to pay more in rent to compensate.
"Letting fees are charged by professional property management companies to cover the costs associated with securing the right tenant. They then act as advocates for both the landlord and tenant to ensure comfort, safety and protection of the investment," said chief executive Bob Brereton.
"If you remove letting fees, many management companies will be forced to increase management fees to compensate. This will simply force up rents."
Mr Brereton warns if Labour's "ludicrous" proposals are introduced, many landlords will quit the market.