Parliament abolishes £410m-a-year scam

The House of Commons has read letting agent fees their last rites! This afternoon MPs voted to approve the final version of the Tenant Fees Bill signed off last week by the House of Lords.

From 1 June, private renters moving home will no longer have to pay fees to start a new tenancy in England. Agents will only be able to ask for rent, and refundable holding and security deposits (capped at 1 week's rent and 5 weeks' rent respectively). The only exemptions are fees to cover the cost of lost keys, late rent payments, changing the name on a tenancy or ending a tenancy early.

For another 12 months, tenants on existing contracts will still be liable for fees written into those contracts, such as renewal or check out fees.

Our volunteer research project gathered fees data on more than 1000 agents around the country and found that the typical two-person household is charged £404 on average in up front, non-refundable fees. The average to renew a tenancy is £117 and to leave a property the average check out fee is £121.

The 2014-15 English Housing Survey 40% of tenants paid letting agent fees – and the latest survey recorded 4.692m private renter households, 1 in 4 of which moved in the past year.

That allows us to calculate that private renters will avoid £190m in up front fees in the first year. From June 2020, tenants moving out will save £57m in check out fees, and the 3 in 4 tenants who stay put will save £165m in renewal fees. Tenants will save a total of £411m* in unfair fees every year.

Not only that, but renters will now be able to:

  • compare properties on the market using a single price: the rent
  • move out of unsuitable homes more easily, without hundreds of pounds to pay
  • negotiate with their landlord more effectively – a threat to move out will be more credible

We have been campaigning for a ban on letting fees since we started in 2014, although for nearly half of that time it has been government policy. After an announcement in late 2016, it has taken more than two years for the Ministry of Housing to develop the proposals, consult on them, consult on draft legislation, then take the Bill through Parliament.

Throughout that time we have been building up the evidence supporting a ban, through our volunteer research project, making the case, then holding the government to its word.

With Shelter and Citizens Advice, we pushed the government to remove loopholes in the proposed ban that could have seen unscrupulous agents inserting unfair terms in tenancy agreements then charging tenants for breaking them.

Our lobbying also led Ministers to tighten up rules on holding deposits so that agents can’t take more than one for the same property and wasting flathunters’ time, and allowing tenants to walk away from a property without penalty if the agent or landlord acts unreasonably. These are a direct result of feedback we got from renters about the proposals.

Special thanks must also go to journalist Vicky Spratt, Hackney Renters and Waltham Forest Renters who all made critical contributions to the campaign.

But our work doesn’t end with an Act of Parliament. As the experience in Scotland shows, we must ensure renters are aware of the ban, and that local trading standards enforcement teams take action when agents are found to be flouting the law. We will be doing more in the run up to 1 June on both fronts.

*figures don’t add up due to rounding


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