A LETTINGS agent has written a strong rebuke to government plans to reduce tenants fees in June.

Sue Gidney, the CEO of Richard James, which has three offices across Swindon, used her article in the Parliamentary Review of best practice in business to warn of the impact of new rules coming into force from June 1.

The Tenant Fees Act will cap deposits for tenants at the equivalent of five weeks rent and make agent's fees more transparent, saving renters across England an estimated£240 million a year, or up to £70 per household.

However Sue warned that the act will be one of the "defining generational issue for letting companies" and leave them with a significant revenue shortfall.

She said: "As a letting agency, we could formerly ask for an upfront fee from our tenants that would go some way to cover our considerable administration costs,the costs incurred by viewings, negotiations and property inspections, as well as those of the significant communications and queries raised by applicants and tenants before and during tenancy.

"Now, however, we will now be legally barred from asking for such a fee. Our industry predicts that this could slash letting agents’ turnover by anywhere between 15 and 25 per cent. This is a terrifying prospect for many in the industry – many, I’m sure, will go under as a consequence, as in very many cases this will exceed any profit."

She warned: "Above all, though, we will inevitably have to adjust our pricing structure and increase our landlord fees slightly.

"This will have the obvious knock-on effect of ramping up the cost of renting. Not only is this contrary to the measure’s intended aim of reducing costs to tenants, it will also reduce the number of landlords in the private rental sector."

The review has several editions, each focusing on an individual policy area with the strategic aim of raising standards by highlighting best practice, and is sent to over 500,000 leading business executives, policy makers and other relevant individuals.

The government will shortly be publishing guidance for tenants, landlords and letting agents to help explain how the legislation affects them.