Letting agents in England avoid blanket ban on fees

Letting agents in England avoid blanket ban on fees

MP’s have voted NO to banning letting agents from charging fees to tenants in England – votes NO: 281 to votes YES: 228.

The Government are also planning on implementing changes so that agents will face a new obligation to display full details of their fees – both on their website and in their offices.

Following calls from Labour’s Harriet Harman to back her party’s plan to ban agents from charging fees to tenants, Deputy PM Nick Clegg has said that there are “virtues” in their push for longer tenancies but warned that the fee ban could increase rents in the long run.

Trade bodies have also voiced their concerns that any blanket ban on all fees would just increase rents further.

In today’s 15th Consumer Rights Bill Sitting, before the vote, Stella Creasey (Labour & Co-operative MP for Walthamstow) said:

Because we still do not agree that the Government are doing enough we are calling a vote. It is not a small minority of letting agents who charge excessive fees and landlords do not want more fees charged, as they can’t afford them. …In the last hour of this debate I have heard of a fee of £1,300 being charged by a letting agent for two tenants to change a name on a tenancy agreement.

…Are we on the side of the consumer or on the side of business?

Clegg said:

“We will be announcing today that we will be placing new obligations on agents to publish in full transparency what kind of fees they are charging so people can shop around and get the best deal available.”

He concluded:

“The fundamental problem… is that we are simply not building enough affordable homes.”

More details on the government’s policy were provided in a statement from Housing Minister and Conservative MP Kris Hopkins:

“The vast majority of letting agents provide a good service to tenants and landlords. But we are determined to tackle the minority of rogue agents who offer a poor service,” Mr Hopkins said.

“Ensuring full transparency and banning hidden fees is the best approach, giving consumers the information they want and supporting good letting agents.

“Short-term gimmicks like trying to ban any fee to tenants means higher rents by the back door. Excessive state regulation and waging war on the private rented sector would also destroy investment in new housing, push up prices and make it far harder for people to find a flat or house to rent.”

LandlordReferencing.co.uk believe the main point here is that

  • If letting agents had properly complied with the ASA ruling last year then there would be no need for further regulation.

Currently, the Advertising Standards Authority only requires letting agents to list compulsory charges to the tenant upfront in the process – facing little more than being “named and shamed” on the ASA’s website.  But if the Government go ahead with their plan this will require all letting agents to publish a full tariff of their fees – both on their  websites and clearly in their offices. And those who failed to comply would face a fine.

RE:  Landlords and Agents | Are you ready for November 1st? … – Click for the full story.

The Labour Party are not going to let this go, especially with the impending General Election, so the answer here is very simple :

  • Regulate yourself to avoid further legislation.

This week at LRS we are celebrating SAFEagent Awareness Week as it is essential that landlords check that their chosen agent is regulated and has client money protection.

We also advise our landlord members to only use letting agents who are members of LRS ;

CLICK HERE to check out the #LRS10 Top 10 Lifestyle Referencing Agent Leader-board.

As well as new legislation requiring all letting and managing agents in England to belong to an approved redress scheme, coming into force later this year, other measures in the pipeline include:

  • a new code to set standards for the management of property in the private rented sector – with a view to making it statutory.
  • a new “how to rent” guide, which will help tenants understand what they should expect from their rental deal.
  • the introduction of a voluntary, model tenancy agreement, which landlords and tenants can use for longer tenancies, which will provide extra security and stability for families.
  • extra guidance for local councils on tackling rogue landlords, protecting tenants from illegal evictions and how best to push for harsher penalties before magistrates for housing offences.
  • increasing investment in house building.
  • increasing institutional investment in new PRS accommodation, via Build to Rent.

The government said its own amendment to the Consumer Rights Bill would be brought forward at a later stage in the legislation’s passage through Parliament.

Ministers also propose to review how well the measures work after they have been operating for a year.

  • Do you agree with this?
  • Is banning fees on the side of the consumer or on the side of business?
  • Do you think fees should be banned?

Please CLICK HERE to leave a comment.

Related topics:

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Labour Party write open letter to letting agents

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Author: News @ Tenant Referencing

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