The government has released a consultation paper on the letting fees ban, after introducing ‘chaotic’ new measures for tackling rogue landlords
A consultation paper on the ban of letting agent fees charged to tenants has been released by the Department for Communities and Local Governments.
The document has been welcomed by those calling for an end to the fees charged by letting agencies.
Green Party London Assembly Member Sian Berry has long been calling for a ban on fees she believes are a profiteering mechanisms.
“We shouldn’t underestimate how hard letting agents will fight to maintain their ability to exploit private renters, but their scare stories won’t wash when Scotland already has these rules with no problems,” she said.
In 2011, Scotland clarified legislation, which banned the fees as long ago as 1984.
The paper coincides with new measures introduced by the government to help tackle rogue landlords, a move that Hackney council has criticised as ‘chaotic’. Landlords can now be fined up to £30,000 for failing to adhere to legislation.
Increases in fees have come in the wake of the almost doubling in size of the private rented sector in the ten years up to 2015, with 19 per cent of all households now falling under that bracket. The government’s measures seek to end abuses of that sector, with Generation Rent revealing that 12 per cent of the 912 agents surveyed did not publically display their fees in line with legislation.
Tenants, landlords, letting agents and other interested parties are invited to fill out and respond to the new consultation document by June 2. The paper welcomes views and comments on how the ban should be implemented and enforced.
Campaigners are sceptical about claims from the industry that rents will rise as the costs are shifted to landlords.
“They’ve cried wolf one too many times,” said buying agent Henry Pryor, who said the fees are “a racket that would have shamed Capone.”
He added: “We know that rents in London are not going up they’re falling, and if the fees that were being charged to me as a tenant are stopped and added to the rent then at least it’ll be more transparent, which is a good thing in what is still a very murky industry.”
David Cox, chief executive of ARLA Propertymark, the regulatory body for lettings agents, accused the consulation of being a populist policy thatwill cost consumers and the wider economy.
“The Government’s housing policy is shambolic and today’s consultation contradicts its already stated aim to encourage longer term tenancies,” he said. The organisation claims that rents will increase by £103 per year should a ban come into force.
Letting agents are equally less enthused.
“I don’t agree with a letting fees ban,” said Helen Kovari, director of Belsize Park agency Admiral Property. “I have to know my onions,” she added, arguing that being a member of ARLA propertymark requires a number of courses and conferences that cost time and money to be taken.
Should a tenant pull out of an agreement at the last minute, resources are wasted if fees cannot be charged for necessary pre-tenancy services. Yet Kovari accepts that while Admiral’s fees are low, other agents do take advantage of vulnerable renters.
“I do think that a tenant’s fee is justified for the work that we do before a tenancy starts, but I do agree that other agents charge too much,” she said.
Last week, councils were handed new powers to tackle rogue landlords, with money taken in fines to be used for private sector housing enforcement.
A recent report by Sian Berry found that Islington and Camden were amongst the top three boroughs taking such measures already. However, the Cllr Berry believes the current measures are not enough, and a flat ban would be more helpful for London’s renters.
“A simpler scheme where letting fees to renters are simply banned would help reduce the burden on councils and help London’s tenants too,” she said.
Housing and Planning Minister Gavin Barwell said in a statement: “These measures will give councils the additional powers they need to tackle poor-quality rental homes in their area. By driving out of business those rogue landlords that continue to flout the rules, we can raise standards, improve affordability and give tenants the protections they need.”
Hackney Councillor Sem Moema has criticised the implementation of the new measures, which also extend the scope of rent repayment orders in the case of harassment, illegal evictions and use of violence to gain entry.
“The chaotic implementation of the measure and belated guidance given to councils has allowed and will continue to allow rogue landlords to exploit tenants while we now rush to put Rent Repayment Orders into practice, and shows the Government’s lack of genuine commitment to helping Britain’s nine million private renters,” the Labour councillor told the Hackney Gazette.
Sian Berry is encouraging all those who have had negative experiences with fees to complete the consultation.
“I am urging everyone in London who has experienced hardship from these unfair charges to respond to the Government and make sure the new rules come in as soon as possible,” she says.
The consultation paper can be found here.
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