Many people have contacted me recently about the Tenant Fees Bill 2017-19, which received its second reading in the House of Commons on 21 May. I know this is a subject that many people feel strongly about, therefore I thought I’d outline my views here.
The Bill sets out the Government’s approach to banning letting fees paid by tenants, with the overriding purpose of making renting fairer, more affordable and transparent, and to give tenants greater clarity and control over what they pay.
Tenants are charged hundreds of pounds a year for a variety of fees when renting a property. Before moving in, these charges can include a holding deposit, a registration fee, an administration fee and a fee for a reference check. Tenants can also be charged fees to renew their contract and to exit a contract and some even have to pay the letting agent to provide a reference for their new landlord.
Moreover, there is currently no upper cap on the fees agents can charge in England. A report by the housing charity Shelter found that one in four people felt they had been charged unfair letting agency fees, with one in seven renters who used a letting agency paying fees of more than £500.
The Housing, Communities and Local Government Select Committee scrutinised a draft form of the Bill earlier this year and concluded that, as it stands, the Bill “does not provide a comprehensive definition of ‘default fee'” and warned that this is “open to abuse” by landlords. Indeed, letting agents involved in the inquiry told the Committee that the fees that agencies would be allowed to charge tenants, including default fees, would be “increased severely” and “applied more rigorously” in order to recoup lost revenue.
The Bill has passed its second reading and will now progress to committee stage for further scrutiny. I can assure I will follow the Bill closely and stand up for renters by backing proposals to close loopholes by which landlords can continue to charge unfair fees.