A new Bill has been introduced in Parliament, supported by Labour and introduced by a Lib Dem peer, which is seeking to abolish letting agents’ fees charged to tenants.
The Renters Rights Bill had an unopposed second reading in the House of Lords on Friday.
The Bill seeks to amend the Landlord and Tenant Act 1985 by stopping letting agents from charging tenants or prospective tenants: registration fees; admin fees; inventory check fees; reference check fees; renewal fees; and exit fees.
The new Bill also seeks to amend the new Housing and Planning Act 2016 by opening up the register of rogue landlords and letting agents to tenants and prospective tenants.
The register, which has yet to come into being, is currently only intended to be open to local authorities and the Government.
The new Bill also proposes that any landlord or agent on the ‘rogue’ database would not be granted an HMO licence.
The new Private Member’s Bill would apply in England only, and has been introduced by Baroness Grender, a former director of communications for Shelter. Labour made a point of offering its full support. While the Bill would normally be viewed as unlikely to become law without government backing, a petition to housing minister Brandon Lewis to ban letting agent fees has now achieved over 250,000 signatures.
Grender contends that private tenants are being failed by a housing market which is stacked against them, and that purchasers of fridges have more rights.
She said: “Unlike purchasers of high street goods or services who are generally covered by well-developed consumer rights, consumers of private sector housing lack the protections they need.
“They are often at the mercy of landlords and lettings agents, and have little recourse to take action in the case of poor quality or rip-off housing.
“A case in point are lettings fees that agents charge tenants.
“Registration fees, credit check fees, reference check fees, renewal fees, name change fees, admin fees, exit fees… the list goes on. Almost all of them arbitrary and disproportionate to the service provided.
“Yet tenants are powerless to do much about it, in a market where demand for homes relentlessly grows and options are limited.
“It is time for Government intervention to address this imbalance of power and build up the consumer rights of renters.
“Letting agents should not be able to get away with double charging fees – imposing them on both tenants and landlords – when in fact it is only the landlord that is the client and therefore the one that should be paying.
“Tenants are charged fees because agents know they can get away with it.
“These fees are already banned in many countries including Scotland and the US because the pro-consumer case for doing so is clear.”
Government spokesman Viscount Younger of Leckie said: “The Government is clear that the vast majority of letting agents do provide a good service to tenants and landlords and that most fees charged do reflect genuine business costs.
“I note (Lady Grender) did acknowledge this briefly in her comments. I do not believe a blanket ban on letting agent fees is the answer to tackling the small minority of rogue letting agents who exploit their customers by imposing inflated fees for their service.”
He said existing laws prohibit landlords and letting agents from “unfair terms or fees”, adding they are required to publicise tariffs.
Comments (26)
Banning agent fees will be a HUGE HUGE mistake, it’s been covered in the arguments above and once again a short sighted answer to another unnecessary change!!! People opposed to it need to do draw 2 columns positives and negatives and it will all become clear. I’d do it for those arguing to ban them if I could upload it
As all the sensible people above are saying – no fees equals higher rents, right? OK so then the government want to cap rents as well? Soon there won’t be any private rental properties left!
Is it just me or does the government hate the rental sector?!
No tax relief on general maintenance/repairs etc., for the landlords anymore,
Constant updating of legislations that the agents have to keep up with and the landlord then has to pay for making the necessary adjustments,
Tenant’s have plenty of rights – who protects the landlord when the tenants fail to pay rent and it takes months to go through the courts for eviction and the landlord also then has to foot the bill?
Agents are supposed to make their fees visible in offices and online – plenty don’t – so why not penalise those that aren’t playing by the rules and call for licensing of agents to stop all this nonsense.
Why are we living in a time where the blame isn’t placed on the person that can’t take responsibility for themselves? If applicants/tenants read the information that is provided to them (i.e. application forms or draft tenancy agreements) then they would know how things work.
Every other business charges for a service, why should letting agents be any different?
Tenants have less rights than those buying a refrigerator … PISH!
The truth is that all those things she wants to scrap actually cost and are a service one is perfectly entitled to charge for your time and expenses. Just as she gets paid for her time and expenses and everyone who works. This is more aimed at the excessive charging that some in the industry have brought on the rest of us.
These time and expenses will need to be paid, and rightly so. All that will happen is they will be pushed towards the landlord if this bill gets its way. But will be self defeating as the landlord will then recover the cost by putting up the rent …… result = tenant is still paying and probably more for long term rents. Is she that blind not to see? This is the thin end of a wedge ………….Warning ………. labour have been for a couple of years now wanting to cap rents and I wonder why.
Sadly with one of the worst offenders being Foxtons, who have just won an award at some self voting ceremony, then as an industry you are leaving yourselves open to criticism.
We all know that in addition to admin fees on landlords and tenants, that many agents, especially where I worked in West London, received huge amounts of income from other sources some which were hidden from the client (landlord). For example, we were charged a small amount by one of the deposit schemes for lodging deposits with them, but charged our landlords almost 6 times the cost price.
I see Foxtons do the same charging £30 for deposit registration. The same applied to a referencing company who were charging a small sum for credit checks and right to rent checks but marketed their product to us on the fact we could charged tenants 10 times as much for that service.
We also made a princely sum from other contractors from an uplift, in the way Foxtons are being accused by their landlord Chris Townley. Sadly some of the larger agents are contributing to the bad press on letting agents in general.
Ban Arrangement fees of £999 quid for a mortgage.
Ban large corporate agencies who use phrases like looking after the customer when they really mean fleecing.
However My dtr is a med student in London and renting a dump from Mr Ben gazzi for 2k a month and this year on a find tenant only (the previous year as they are staying in the same flat) has been fleeced for £600 quid for for this year as they are staying.
So that,s £600 quid a year for nothing.
Ban that.
Here we go again with the government making the lettings industry completely tenant sided. Being based in Wales with the delightful Rent Smart Wales being introduced charging us a huge fee to now try and ban charging tenant fees. Maybe if the MP’s took a pay cut or even stopped claiming for their second homes they could cover the tenant fees alone. Can’t even run a country properly so keep out of the property industry before you destroy that too.
We only charge one small admin fee – To a successful tenant on move in to cover admin of tenancy, guarantor, check in etc.
There are no application fees to multi tenants, when only one is successful. No inspection fees, renewal, check out, deposit lodge, return, etc etc. All that does is cause anger and churn. Why would you want to anger a customer and create an environment where they’d want to leave?
It is the ‘Ryan Air’ model of extra fees that has led to this.
So if transparency and a level playing field for all agents means no tenant fees – that would be fine with us.
As I keep saying, the solution in SO simple:
Cap fees, don’t ban them.
Cap fees, don’t ban them.
Cap fees, don’t ban them.
Do you know how many agents in my town display their fees on their website? 9% and I’m one of them.
Do you know how many agents display their fees in the office? 5% and I’m one of them.
How about properly policing the legislation that was introduced months ago so tenants can have a fair look at the fees that they are being charged before tarring all agents with the same brush.
Totally agree with stopping double charging – charging tenant and landlord for the same service.
I wonder if the Baroness was one of those executives at Shelter on £100k+ salary a year?
It does all start getting a bit tedious, anybody would think that Letting Agents are earning a fortune! I genuinely believe that Letting Agents work hard for their money although the few unscrupulous ones cause all the issues for the others. We must clean up the industry and show Government how it can work. If the industry does nothing government will tell us how it will look and it wont be pretty!!
I think we should stop charging tenants reference fees etc if the EU gives lettihg agents a bailout. (Sorry inventive)
Lmao at the idea.
Fact
these hidden fees every one goes on about are nonsense. If people read the agreement that they sign for right at the Start before collection of keys. It would be in the agreement of all fees.
fees.
We should then look at all mortgage companies arrangement fees, etc. Get real.
Sheltor – you are really doing your job NOT.
Do you make your T’s&C’s available before the tenant has financially committed? It’s all very well showing them when they pick the keys up but by then it’s a bit late.
Make them available at the point of viewing not the day they move in.
My understanding is that all of the so called ‘hidden fees’ have to be displayed clearly in the Agency offices and their respective websites.
All potential tenants can clearly see, before they apply the agents fees to BOTH Landlord and tenants to ensure there is no duplication of fees.
When we advertise a property with ‘no up front fees’ we are inundated with poor quality applications from applicants with no real urgency and nearly all of these withdraw their application after a few weeks.
One of the purposes of fees is to ensure that there is a real financial commitment from the applicant at the start of the application and tends to filter out those that are most likely to fail the referencing procedure.
When will the politicians learn that our businesses are not a charity, and as Rickman2154 has noted, we conduct viewings at a time to suit the tenant often outside of normal office hours. A reduction or banning of fees will ultimately lead to an increase in rent which in the long term far outweighs the cost of rental fees.
If applicants are unhappy – don’t apply, I am sure that there are other properties readily available in most areas outside of the capital !
Sooner or later this WILL happen so we might as well get used to the idea and plan for the eventuality.
If we cannot charge tenants then we shall charge landlords – who in turn will require more rent from the tenants.
And just who does the government expect to pay for these various steps,without which,no one can rent a property. It will end up back in the tenants’ camp as higher rentals. Otherwise agents won’t do rentals and no one will rent properties.
Those older readers out there may remember Screaming Lord Such with his political party known as the Monster Raving Loony Party. They are back disguised as the Conservstives,Labour and Lib Dems
Surley higher monthly rent would be preferable to hidden add ons?
The tenant should be able to pay one fee the monthly rent.
How the agent charges their client, the landlord, is no business of the tenant.
Good idea, a monthly levy of £100-£150 should cover it and could make it more profitable!. If only politicians started using their brains rather than their power life would be better for all. Since I started letting I no longer upgrade property so much as I loose out having to pay council tax whilst works are being done (used to have a 6 month void period). More money grabbing councils with an extra tax levy. Luckily at the moment I am not in RIP OFF ROGUE COUNCIL AREA LIKE CROYDON who levy extra taxes under the guise of licensing. I still have to fight rogue utility companies who make illegal standing charges when property is not using supplies. The Conservative dimbo’s have given private water companies powers they should not have. The unending attack on landlords is clearly to deflect the FAILURE TO PLAN SUFFICIENT HOUSING FOR THE HUNDREDS AND THOUSANDS of migrants and believe me it get worse if we continue in the EU and with a lame prime minister who promised 10’000’s of migrants but grants 360,000 pa (50% from eu and not controllable if we stay in).
Still I guess if the government clowns pay others to be innovative in ******** landlords then we need to be innovative in response if we are to survive.
Politician=liar or con-man I am sure those who thought London’s fares would be capped when they voted the London Mayor in now realize politicians all speak with fork tongue!
Strange how it is acceptable for public bodies to charge for nothing like property licenses, rates when property is empty but pay for the services of a letting agent is wrong. Ensure reasonable charges yes. BAN ALL Peers with crazy ideas YES
Sounds ideal, just like World Peace and Global Equality… However in the real world and an open market place, where a business model has been in place for many years which represents a service and cost that we (Responsible Agents) believe fair options are not that straight forward.
Tenants would ideally like No Fees, but Landlords would ideally like to have to pay No Fees either. The fairest option to share fees is one widely accepted for many years. As professional agents we publish our fees in full, and believe that we ‘as other professional agents’ offer a valuable service to protect tenants (we don’t deal with dodgy landlords) and at the same time protect our landlords (as we go above and beyond to offer a superior service and weed out the bad tenants). ergo: we act for both sides…
Comments are also true which point out that if agents are squeezed to pass all fees onto Landlords then there is likely to be less professional managed housing stock which will harm the private rental housing sector ‘Helping Who Exactly’?
I agree that there needs to be a way of weeding out poor agents, but it needs to be well thought out. I would suggest that it be spear headed by a professional body such as RICS. Not by a point scoring politician or by a body such as Shelter who sit firmly on one side of the fence…
What is wrong with shelter et al? Businesses gave to make money or they close; so 2 choices as far as I can see. First choice we abolish fees and charge landlords who pass the cost on (landlords are businesses too!) To tenants in higher rents second choice agents lay off staff to reduce costs and maintain profit margins which then leads to corner cutting and lower levels of sefvice for renanrs and landlords.
For goodness sake baroness no brains, wake up and smell the coffee, you are helping nobody with your ridiculous ventures, merely hurting the people that you think you are helping!
Every business has to charge for service, those charges will vary according to overheads, a business in a capital city has higher overheads than one in a lesser location.
rogue letting agents and rogue landlords again????? Where’s the list for rogue tenants????
I’ve built one and access will be provided free of charge to agents as long as they have a current DPA registration
‘Paying for things I want really sucks’
Said the Great British rented population.
These are facts:
If you reduce the income a letting agent (a business may I add) gains, it will have a negative impact on the outcome of the service it provides.
If you add the cost onto a landlords fee, he/she will increase the rent to cover it, alternatively they will exit the PRIVATE rented sector, this will mean higher rents due to lower supply.
The money had to be recovered from somewhere.
#douchebags
I think it’s more about each and every applicant paying between £150-300 simply to apply with no guarantee that they can secure the property.
Too often the additional charges are not made clear to the tenant.
Lettings agents should obviously make a profit but if its not transparent in its fees you can understand the point.
Rickman Properties
Once more a ludicrous waste of tax payers monies – We ALL offer a FREE viewing service in the rain, wind, snow & sunshine, Chauffeur driven most of the time by expensive legally trained staff providing professional advice. often stoop up on a 7pm viewing on a Friday evening without warning!! What more can we say, but where is ARLA in all this??
I cannot believe that you can ethically talk of rents being increased if this law is placed..
The rents are ‘ already’ morally out of control….How in Gods name can we justify increasing them more….The loopholes one needs to secure a property..these days .that coincidentally one is actually attemtping to secure a ‘ home ‘ for themselves & family…is beyond shameful.,..I think people forget in an affluent society…this is not a business deal but a basic human need…to offer respite & stability at a time when society is anything but…& to make profit, above & beyond from this…is ethically wrong. We are not here to pay above & beyond the morgage rates…on your second home sor to line your pockets….above & beyond…at our own expense/…..of keeping a roof over our heads & food on the table. We are struggling to find homes to keep us safe…& well..
Even the governments would not be able to secure your proerties….with their own shoddy credit histories..& lies….& yet you are putting so much pressure on us..to jump through such tight loopholes…penalising us…for not having emplyment…animals, smokers…even children in some cases!! I mean ….Get over yourselves….& these properties are so often neglected & mismanged…Despite paying for these homes…we have so many laws & rurels being placed on us..let alone Magnolia!! & still you dont get it…The TV programmes of owners crying outside thier homes…thier acquistitions…at so many tenants…that have done nothing wrong!Except wanting to stay in thier homes..
Homes people…..You know,…….That little thing that adds a whole new perspective to someones ability to maintain thier lives in a stable way…in a society that IS feeling increasinglty unstable…& still you think this is just about business deals & people knowing thier place & being grateful
Greed & manipulation & control…….& lets step over all those that have fallen, not inherited in some instances & certainly not been fortunate enough to have cashed in the wholly unethical proiperty surge some years ago! I mean really …if ever there was a time for unequal distribution of wealth!
Whomsover is cashing in & taking Londons property prices seriously as being invicative of a well functioning & caring society is serously malfunctioning & narcissitic Bordering on Sociopathic.
Lift your heads up people..society is not working on the levels of taking from those that cannot afford rather than those that already in the main, have so ****** much.
Making livelihoods in these unsrupulous ways & vastly unequal times is not the answer.
Being human is bloddy hard work…we all work hard just being amongst this carnival………..But being in robot mode…is no justification..
How long before we have our shanty towns outside our own windows….
When we create an Us…we also create a Them! But there for the grace of god go I…
The rents are criminally to high…And if you can’t see that…then you are not in touch with the grass roots & your fellow humanity..& you are protected by your money & the choices & blindspots that accompanies that.
I think rents are meant to be a 1/3 of your yearly income..In a meeting with shelter the other day…I mentioned a rent of £600 a month………& even at her managerial level………..she could not afford that.
Unscrupulous! That ‘s what it Is…& those that are shouting the loudest are completely out of touch…& protecting thie own.
Cuurently being evicted from my ‘ home ‘ & unable to find something I can afford, despite never having missed a rent payment in over 6 years or complained about any of the disrepears in this time…My home was too valuable to me, to rock the boat…But after finally getting the well water tested …& it being severely contaminated…I was after 5 months with no water, presented with an eviction notice…This is my home.. I have 2 chckens & 3 cats! & cannot find anywhere, as yet to rent. Super scary..I cannot grow my veg for this years syupply or live my life or make any plans…& this has been unrelenting for me, as I search every day to find a rent I can afford, an agency that will take me…& a home that is open & caring enough to accept my beloved animals & I…& my choice of lifestyle. Not all of us want to live in little concrete estates & sterile strips of fake lawn.or crazy roomed house shares..or bedsits! Some of us want to live & breathe & be a little more self sustaining …But not have to pay the ridiculous rents being slapped on these properties… £1500 is strangely enough above & beyond what I can afford…Over 3 times! If you know of anywhere …anywhere in The UK…that is affordable at a maximum of £500 …please do let me know..A cabin…or anything would do me…so long as my animals are safe…& I can actually afford it…& not vacate…as so many do…just a few months into their tenancies…because people are just not affording them. And what a surprise back on the market they come…& another non-refundable application fee…& deposit no doubt kept! So definitely feeling a little miffed.But grateful nevertheless, for having a wee speak out & very long share …Gratitude for that…..regardless of whether you’ve read it or not…Always cathartic to speak what’s on your mind…As no man is alone…..or immune to this little sharing of our humanness…No matter how thick skinned we have become or how good a job we have taken in obscuring these inner shared vulnerabilities. I do wonder…when countless applications are being submitted for the same property as some most definitely are………Are they really taking in multiple non-refundable applications fees from people, for the same property!! uuumm…In which case,,,,hopefully this law being passed, will put a stop to that in the very least… As for working long hours…I only hope you are being paid for your extra workload…..as so many are not. And so many bemoan their working life…but when push comes to shove…people only ever meet & validate themselves through their working life…So really its not something that is not being utilised by you. When people have the option to take time out…They suddenly realise they have no idea who they actually are…& who quite frankly they are meant to be..Such is the strength & the shortfall of being part of a frankly self serving, overly dependent on unnatural resources lifestyle /.society.