Government Launches Consultation of Letting Agent Fee Ban

The Government has launched its consultation on its letting agent fee ban proposal.

The plan, originally announced in the Autumn Statement, would ban letting agents charging fees to tenants.

The last four housing ministers have previously attacked the proposal.

In 2013, then housing minister Mark Prisk said that a ban “cannot be the answer to tackle the minority of irresponsible agents”, while his predecessor, Kris Hopkins, described the plan as a “short-term gimmick” that would mean “higher rents by the back door”.

In 2015, Brandon Lewis, now a Home Office minister, said that it would “reduce the number of properties available to rent”, while the current Housing Minister, Gavin Barwell, tweeted last year that it would be a “bad idea” that would increase rents.

The Residential Landlords Association (RLA) argues that while high street letting agent fees do cause problems for tenants, such issues should be looked at as part of a comprehensive strategy for the private rental sector.

The Policy Director of the RLA, David Smith, says: “High fees are clearly a problem for tenants, but this piecemeal approach will do nothing to address the fundamental problem, namely not enough homes to rent.

Government Launches Consultation of Letting Agent Fee Ban“As almost all housing ministers since the Conservatives came to power have noted, today’s proposals risk making rents more expensive, making life harder for tenants.”

The RLA warns that the plans will do nothing to improve enforcement of the law that currently requires letting agents to publish the fees they charge online and in their offices. Just a handful of councils have taken action against agents who flout the law.

Smith adds: “Regulation without proper enforcement is meaningless and only helps the rogue agents.

“Whatever the outcome of the consultation, we need a system that ensures finite resources are focused on finding and rooting out the crooks, not penalising those agents and landlords providing a good service.”

The Head of Policy at the National Landlords Association (NLA), Chris Norris, also comments: “Yet again, the Government has published plans to tackle a particular element of the letting agency market, whilst at the same time suggesting other areas that they might like to look at in the future.

“It is about time that landlords and agents were given some certainty about the market’s regulatory future, which could be easily achieved by agreeing an over-arching system of regulation for letting agents once and for all.

“We’re particularly concerned that the scope of this consultation appears to have drifted to include tenancy deposits, with suggestions that a cap may now be necessary. This looks like yet another attempt to affix a sticking plaster to a perceived problem without really understanding what is driving behaviour in the real world.”

Richard Price, the Executive Director of the UK Association of Letting Agents (UKALA), adds: “While we’re pleased the Government listened to our suggestion to exclude holding deposits and in-tenancy charges from the scope of this ban, the fact cannot be ignored that it will seriously affect our members’ ability to run their businesses.

“Small agents in this market are drowning in constant policy interventions. The publication of this consultation in isolation, at a time when we’re awaiting further proposals on requirements for all agents to hold Client Money Protection insurance, is proof that this Government does not have a clear vision for the future of the sector.

“If they really want to completely regulate letting agents, then why waste time by constantly moving the goal posts?”

From a different viewpoint, the Director of tenant lobby group Generation Rent – which previously welcomed the letting agent fee ban – Dan Wilson Craw, reacts to the announcement: “Letting agents have a captive market of renters who are desperate to find a home, and that has allowed them to charge whatever fees they want.

“The Government’s new proposals to end this racketeering would finally give renters some consumer power, for example, by making it cheaper to move out of an unsuitable property.

“However, agents will throw everything at fighting these changes, so it is essential for tenants to make their voices heard as the Government gathers responses.”

What do you think of the prospective letting agent fee ban?

Be aware that it is believed that the fees will be passed onto landlords, which may force some to charge higher rents to tenants. In turn, this may make it harder for tenants to pay their rent.

To ensure you still get paid if your tenants fall into rent arrears, take out the ultimate peace of mind cover – Rent Guarantee Insurance:

©2022 Just Landlords