UK Government launches consultation on axing lettings fees – another Lib Dem win

Back in the day, Liberal Democrat peer Olly Grender worked for Shelter. Her passion to help people with housing matters has never left her and she continues to campaign on a range of housing issues. The pressure that she put on the Government resulted in their decision to end lettings fees for tenants. We reported that this was going to happen last November but the Government launched its consultation on Friday.

Olly introduced a Private Members’s Bill in the Lords last year which would have outlawed these fees. Five days after the debate, the Government announced the measure. Olly explained why it was so important to protect tenants from these charges in her speech proposing her bill:

Shelter’s research shows that average letting fees are £355 per move, with one in seven people paying £500. On rare occasions, renters have been forced to pay fees of £900 or more to a letting agent, simply for the privilege of moving into a home. Reference checks, credit checks, administration fees, inventory fees—the list goes on. Invariably, the fees charged are extortionate compared to the cost actually incurred by the agent and they are not necessary. Furthermore, any cost actually incurred should be covered by the lettings agent’s client—the landlord—not by the tenant. Far too often these high up-front costs are proving a barrier to tenants, who simply cannot afford to move.

This week Radio 4 broadcast a documentary, presented by Sarah Montague, called “After Cathy”, 50 years on from Ken Loach’s “Cathy Come Home”. It featured the audio diaries of three homeless people over the course of a year. One of them, Zara—not her real name —from London, a teacher and mum of a three year-old and an 11 year-old, had lived in the same private rented home for six years when her landlord put up her rent. She could not afford to move to cheaper accommodation because she could not afford the up-front costs of moving. This teacher is now homeless and has been living in emergency accommodation with her children for a year—a teacher. Does anyone in this Chamber really believe that this teacher, who could not afford the up-front costs to move to cheaper accommodation, would have been helped by a nice clear and transparent breakdown of the additional costs of the credit check, the inventory check, the administration charge and the cleaning costs, on a nice large poster in the lettings agency’s office that complied fully with the Consumer Rights Act, with clear guidance about who she could complain to if the fees were not sufficiently transparent? Does anyone genuinely believe that at that critical moment when she could not afford the up-front costs to move somewhere cheaper, transparency would have made the difference? It would not.

In response to the consultation being launched on Friday, Olly said:

Too many renters are being ripped off by unfair letting fees and left behind by our broken housing market. A total ban on all tenant fees must be brought in as soon as possible, including renewal and exit fees, to avoid agents getting around the ban by the back door.

The only fair system is where landlords pay the fee, to stop agents double-charging.

The Government must not bow to pressure from letting agents who are lobbying hard to protect their profits. They have had time to improve voluntarily but they have failed to act. Unscrupulous letting agents must clean up or close down.

It’s important that the letting agents don’t win the day, here. You have until 2 June to respond to the consultation. I wouldn’t put it past the Government to renege on their plans, so let’s make sure that the balance of the argument in the consultation is against the unfair exploitation of vulnerable tenants.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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6 Comments

  • Diane Reddell 9th Apr '17 - 11:28am

    At the University of Northumbria where I am doing my second masters, the student union has its own letting agency where letting fees do not exist. It saves a lot of money for students and it works for landlords as their properties are let and they get the letting revenue. I encourage that such a scheme is set up for other renters/landlords.

  • “UK Government launches consultation on axing lettings fees – another Lib Dem win”

    Hardly a win, just the Tories stealing a policy. All parties do it and none give credit to the party they stole the policy off. Increasing the tax threshold was a Lib Dem policy, but you wouldn’t think so after the Tories jumped on the band wagon. I’m afraid it is those that claim the credit rather than those who came up with the idea who gain the benefit.

  • Tony Greaves 9th Apr '17 - 9:12pm

    A small win but a lot more (and deeper) reform of the private letting system is needed.

  • nigel hunter 9th Apr '17 - 11:16pm

    Is it not interesting that this comes out in time for the local elections? Likewise the Governments stance on litter just in time for them?

  • Dean Crofts 10th Apr '17 - 4:04pm

    Step in the right direction. There still needs to be local accountability for rogue private landlords. Many local authorities do not have tenant support officers, even though parliament has given them the powers to hold private landlords to account. Until the private rented market is fixed, tenants not taken advantage of, new houses built, letting agents willing to accept people on total income and not deny benefit claimants housing (89% of landlords will not accept individuals or families on housing benefit) regardless of total income amount, the a fairer system for all will exist.

  • Hopefully the consultation will take evidence from people at the coal face and know what they are talking about. Sorry to be blunt, but there is more than one side to this. I will not go into the whole debate here as it is far too complicated. In my experience it would be fairer and more cost effective to cap fees rather than outlaw them. Tenants will end up paying one way or another.
    @Dean Crofts. I would like you to risk putting your £200k asset in the hands of someone who has nothing to lose. Good luck. Believe me, when it goes wrong you will change your mind. The private rental market is not the place for housing benefit tenants and the sooner a government gets round to fixing the housing market the better.

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