A little over a year ago, following The Debrief’s Make Renting Faircampaign, the Chancellor, Philip Hammond, announced that letting fees would be banned for tenants in an attempt to regulate the unfair, out of control and unregulated private rental sector.
Todays, following a 6-month consultation, the draft Bill which will finally make letting fees illegal is being introduced to Parliament. This brings a long overdue end to the costly upfront fees that millions of renters are still being subjected to.
Before the Bill can become law it will be scrutinised by Parliament. At this stage, there are several things worth noting for renters. Among the things proposals government is proposing is to make it a civil offence to charge tenants letting fees. This offence would carry a £5,000 fine for anyone caught charging fees to tenants. If an agent was then caught again for committing the same offence within a 5 year period they could be liable for penalties of up to £30,000.
There is certainly a question of whether or not agents will adhere to the ban. Letting agency fees have been illegal in Scotland since the 1980s. The law had to be reinforced in 2012 because so many agents were flouting it and deliberately charging fees anyway. To ensure that these proposed new laws are enforceable the government wants to create an enforcement authority who will work alongside trading standards to make sure that anyone who tries to continue with the practice of charging unfair (and soon to be illegal) letting fees will be held to account.
Another significant proposal is that holding deposits, which so many renters have paid in order to secure a property, would be capped. Currently, there is no limit on what an agent or landlord can charge a tenant prior to the start of their tenancy.The Tenant Fees Bill proposes to cap deposits at no more than one week’s rent and security deposits at no more than six weeks rent. More than this, the bill goes further and sets out new requirements for landlords and agents when it comes to returning deposits promptly. I think we can all agree that it’s about time!!
Research conducted by Shelterfound that the impact of the fees has been huge for renters. 1 in 4 people who have dealt with a letting agency in the last three years said they had to borrow money to cover the fees. Worse still, 1 in 6 reported cutting down on food and heating to meet the cost of the fees they were being asked to pay. Indeed, 1 in 4 said that letting fees had prevented them from getting a new home. With this in mind, there’s no doubt that the Tenant Fee Bill will make a tangible difference to the lives of millions of people renting in England.
Over the last 6 months, the government has run a consultation to which they invited renters to respond. More than 9 out of 10 tenants who submitted evidence to the government said they wanted a complete ban on letting fees. 7 out of 10 tenants told the government that letting fees had affected their ability to move, confirming Shelter’s findings.
The Secretary of State for Communities and Local Government, Sajid Javid, told The Debrief 'This Government is determined to make sure the housing market works for everyone - including those that rent their home.'
'For some people renting - not only are they having to pay fees each time they move, but they can also be hit with surprise fees from their letting agents which are not clearly explained.'
'We believe tenants should no longer be sprung on with extra costs that they may struggle to afford and should only be required to pay their rent alongside a refundable deposit. Just as the Make Renting Fair campaign called for, we’re taking action and delivering on our promise to ban letting agent fees, alongside other measures to make renting fairer and increase protection for renters.'
Meanwhile, Liberal Democrat peer Baroness Olly Grender who worked closely with The Debrief on Make Renting Fair as well as fronting a Private Members Bill in Parliament on the issue said 'I'm delighted we finally have the legislation in print to ban fees and cap deposits, which are absolutely vital changes to make renting fairer. Many people have campaigned for a long time to see these things happen, and it's a credit to their hard work that these changes are now taking place. These draft proposals must be given proper scrutiny to ensure all types of fees are included, so they can't simply be renamed by unscrupulous letting agents looking for loopholes, and the ban must be brought in as quickly as possible.'
Today’s news is certainly one small and long overdue step forward for renters. There’s no doubt it will make people’s lives better in real terms. But there’s a long way to go before this country’s broken housing market is fixed.
Like this? You might also be interested in:
We Made Renting Fair! Letting Agents' Fees Are Going To Be Banned
Renters Are Spending More Of Their Incomes On Rent Than Ever Before
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This article originally appeared on The Debrief.