Generation Rent

You read that right: before the ban on letting fees has even come into force (this Saturday, folks), letting agents are already flouting existing laws on fees. Since 2015 agents have been supposed to display details of the fees they charge tenants online, but we've found 21 that are not.

Local councils could be collecting £5000 in fines for these offences, so the fact that agents are still getting away with it does not fill us with confidence that the fees ban will be enforced effectively.

We're very grateful to Which?, the consumer rights organisation, for their latest investigation into letting agents. A mystery-shopping exercise, targeting 20 agents around the country, revealed practices that potentially breach the law: from denying would-be tenants the opportunity to review terms and conditions before putting down money, to opaque fees.

This piece of work is particularly useful because it gives tenants an idea of what bad practice to watch out for (and challenge) the next time you're trying to find a new home. Here's what they found...

The ban on letting fees is coming – from 1 June, renters in England (including licensees and property guardians as well as tenants) will not have to pay fees for admin, references or inventory to move into a new home. Just the rent and refundable deposits.

This should have a huge impact – not only on renters’ finances, but on their relationship with the landlord and agent too. If the landlord isn’t fixing something or is asking for a higher rent, the tenant is in a stronger negotiating position because it is now cheaper for them to move out instead. Faced with the prospect of a tenantless property, the landlord is more likely to capitulate.

But letting agents are a crafty bunch – their ability to invent fees out of thin air is why we’ve got to this point. And many are willing to break the law – our research on lettingfees.co.uk found that 12% of agents weren’t publishing their fees, in breach of the Consumer Rights Act 2015.

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.

The letting fees ban has inched closer to being law. Yesterday a Grand Committee of the House of Lords went through most of the Tenant Fees Bill, line by line. There are still potential loopholes that could leave tenants vulnerable to exploitation.

Following lobbying by ourselves, Shelter and Citizens Advice, and amendments by peers including Baroness Grender and Lord Kennedy, the government has now agreed to examine them before the Report Stage.

Good news for hard-pressed private renters facing rip off fees from letting agents.

The Government has introduced the Tenant Fees Bill into Parliament, which aims to ban the fees commonly charged by letting agents for new tenancy agreements. This is part of the Government’s promise to make private renting cheaper and fairer and it’s a much-needed piece of legislation, especially as a quarter of us in the UK will rent privately by 2021.

Landlords get to ask tenants for a reference, but there's no way we can check what a prospective landlord is like. That's why we've long been calling for a central database that names and shames criminal landlords.

From today we've got one. But there's a catch: only local councils can access it.

The Commons Housing Committee has published its report on the Draft Tenants' Fees Bill today, making recommendations to the government for when it formally introduces the Bill to Parliament. 

Generation Rent, along with charities, landlord groups, local councils and other industry organisations, gave evidence to the inquiry earlier in the year. There were positive outcomes on rents and deposits, but more work is needed to make sure the ban covers all fees - and that it's enforced properly.

Here's a summary of what we asked for - and what we got.

Last October, Sajid Javid, the Secretary of State for Communities (and now Housing) said that he wanted to start requiring landlords to join a redress scheme if they did not already use a letting agent. 

The government is now consulting on plans for this. The good news is it is considering doing away with the three different schemes tenants have to navigate when they have a complaint at the moment.

The internet has already shaken up the music industry, television, taxis and self-catering holidays. Investors are now looking for the next industry to disrupt with technology and property seems ripe for the picking. 

As the national voice of private renters, we agree that the property industry as it stands fails its consumers in too many ways, so things need to change. Even when we succeed in changing the law, like the forthcoming letting fees ban, we still need to ensure that it's implemented properly and the industry adapts in the right way. 

But we can't allow slick and revolutionary new services or initiatives to simply treat tenants as cash cows in the same way that many letting agents and landlords currently do. So this is what we think the market needs - and how the tenant should benefit.