MPs debate letting fee ban

The ban on letting fees is currently the government's flagship policy to help renters, and we're currently waiting for a draft bill to be published, which follows a consultation that we and hundreds of our supporters responded to.

In the meantime, MPs gave us a taste of how the legislation will proceed in Parliament yesterday morning by debating the subject for the first time since last year's Autumn Statement.

Alok Sharma, the latest Housing Minister (Gavin Barwell lost his seat at the election), didn’t give much away. The outcome of the consultation will be published “shortly”, while the draft bill will be published “in due course”. He noted that there was scope for further regulation of landlords and letting agents, but a lack of clear consensus on what this would look like.

Despite the government’s manifesto commitment to “looking at how we increase security for good tenants”, Mr Sharma only cited the government’s encouragement of “the offering of longer, family-friendly tenancies of three years or more in build-to-rent schemes” – which will only benefit 80,000 out of nearly 5 million households. He also dismissed calls for rent stabilisation.

On the matter at hand, he stuck by the government’s proposals and the arguments for reform that it set out earlier in the year, which are refreshingly in line with what we’ve been saying for years.

The debate was called by Kevin Hollinrake, Conservative MP for Thirsk & Malton, who founded the Hunters chain of estate agents. Although Hunters agents charge an average of £416 to set up a typical tenancy, he initially supported a cap on fees last year, and is now behind the government’s proposals.

He sought to highlight the potential for unintended consequences, though this appears to be thin on the ground. The fear of rent increases is hard to separate from the wider gap between supply of and demand for homes which has sent rents up since the end of the recession. It is worth noting that the lettings industry estimated that landlords would pass on costs of only £103 per year – less than the average annual renewal fee alone. Mr Hollinrake added that tenants welcomed the extra price transparency the ban would usher in.

The fear that letting agents would discriminate against low income households should be avoided by the proposed exemption of holding deposits which are supposed to cover the cost of references if the tenancy doesn’t go ahead. There remains potential for agents to abuse holding deposits so the legislation must ensure they’re covered by the regulations.

Mr Hollinrake also pointed out that more landlords will start self-letting and would need oversight to ensure they didn’t charge fees. His proposal would be to bring landlords under the existing redress schemes – a step in the right direction, though we want to see a national register of landlords with licensing at a local level to prevent poor practice in the first place.

Several MPs from both sides of the House spoke in a relatively consensual debate – most speakers were supportive of the ban. Labour’s Helen Hayes called for an end to unfair Section 21 evictions while Conservative Charles Walker highlighted the problems arising from landlords being allowed to keep tenants’ deposits and carry out their own inventory. The whole 90 minutes is available to watch and the transcript is online here.


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