New measures to provide a fairer deal for renters by banning unfair letting agent fees and encouraging greater competition in the rental sector have been set out by the government today (7 April 2017).
The proposed measures will stop hidden charges and end tenants being hit by costly upfront payments that can be difficult to afford.
The move will bring an end to the small minority of agents exploiting their role between renters and landlords, banish unfair charges being imposed and stop those agents that double charge tenants and property owners for the same service.
Proposals also ban any letting agent fees being charged to tenants by landlords and other third parties. This stops tenants having to pay fees through the back door by other routes.
The measures will improve competition in the rental market and further drive up standards by placing the onus on landlords to shop around for more competitive fees for services they pay for.
Housing Minister Gavin Barwell said:
We’re determined to make all types of housing more affordable and secure for ordinary working people. Tenants should only be required to pay their rent alongside a refundable deposit and not face hidden fees.
Our housing white paper sets out other ways we will help those renting, including building more homes for rent and providing longer, family friendly tenancies.
A report from the charity Shelter found that nearly 1 in 4 people in England and Wales feel that they have been charged unfair fees by a letting agent. Fee levels vary considerably and the charity found that 1 in 7 tenants pay more than £500.
The consultation on stopping letting agent fees comes after the government set out its plans in the recent housing white paper to create a bigger and better private rental sector that meets the needs of tenants and landlords alike.
The paper sets out measures to build the homes Britain needs now and to give those that rent a fairer deal. It puts tackling the high cost of renting at the heart of its plan to fix the broken housing market.
The ban also recognises that landlords are being hit with dubious fees. The measures create a more transparent market place so landlords can easily shop around for an agent to provide the quality of service they want at a price they are willing to pay. This avoids double charging and results in a better and more transparent service.
Whilst most letting and managing agents provide a decent service, there are those that offer a poor service and engage in unacceptable practices. We want to ensure all tenants receive a good service from their landlord and letting agent.
Other measures in the housing white paper to help renters include:
- amending planning rules so councils can proactively plan for more long-term Build to Rent homes
- consulting to allow developers to offer more affordable rent alongside other forms of affordable housing
- working to ensure longer-term family friendly tenancies are available in the private rental sector, including working with the British Property Federation and National Housing Federation, to provide more stability for families who are currently renting
Good letting agents that provide services that represent value for money to landlords and tenants will continue to play an important role in the market.
The proposed measures come after new rules came in to force yesterday (Thursday 6 April) that crack down on the small minority of rogue landlords that shirk their responsibilities. Councils can now impose fines of up to £30,000 as an alternative to prosecution for a range of housing offences.
Rent repayment orders, which can be issued to penalise landlords managing or letting unlicensed properties, have also been extended to cover a wider range of situations. These include the illegal eviction or harassment of tenants or using violence to secure entry.
The Chancellor announced at the Autumn Statement 2016 that the government will ban letting agent fees paid by tenants, to improve competition in the private rental market.
The consultation has now been launched. It applies to England only and runs for 8 weeks.
The government is keen to engage with the sector and will host a number of workshops, in various venues throughout the country, to discuss the consultation and the implementation of the fee ban. See the consultation for further details.