Letting agent fees come under scrutiny in Commons debate

Letting agents’ fees, criminal landlords and longer tenancies all took centre stage in a House of Commons debate yesterday.

Labour MPs led by shadow housing minister Jack Dromey called for a clampdown on ‘rip off’ and obscure letting agents’ fees, while calling for tenants to be given secure, longer-term tenancies. Labour lost their vote, but Tory minister Don Foster speaking for the Government conceded that they would be “listening carefully”  when the OFT and CLG report on their respective inquiries later this year.

In yesterday’s debate, Labour MPs pointed to the example of the London borough of Newham in pioneering a borough-wide register of landlords – which Dromey described as giving an “admirable lead”.

During the lengthy debate, the Labour MP for Leicester West, Liz Kendall, said she had done a mystery shopping exercise on letting agent fees. She said these were unfair, and one agent was charging a fee for what, she said, she didn’t know.

Another MP, Rosie Cooper, using parliamentary privilege, named a lettings agency in Lancashire for its ‘appalling’ practice of charging tenants £200 for a credit check, which tenants then failed.

She said both agents and landlords needed to be regulated.

The opposition debate centred on a motion tabled by Labour, which noted “with concern the lack of protection afforded to tenants and landlords by the unregulated lettings market”.

Labour said that the rented sector creates a “lack of stability, security and affordability for families and other renters”, and the motion also called on the Government to empower local authorities to deal with rogue landlords.

However, housing minister Mark Prisk made plain the Government’s opposition to red tape in the private rented sector.

His amendment to the motion said that the Government “supports action to be taken against the small minority of rogue landlords, without burdening the whole sector with unnecessary costs”.

The amendment also said that while it backed measures against criminal landlords, “excessive red tape would force up rents, reduce choice for tenants and undermine future investment”.

Prisk, a former chartered surveyor, was, however, reminded of his own attempt to introduce regulation of letting agents by Dromey, who said that the RICS had described the private rented sector as like ‘the wild west’.

Dromey said the RICS “are not the only surveyors” with this opinion. Prisk had, when in opposition, tabled an amendment to put letting agents on the same legal basis as estate agents.

“I agree with him,” Dromey declared. “The question is, does he agree with himself.”

The Government’s stance yesterday in the Commons reflects its position last week in the House of Lords, when it made it clear that it would not support Baroness Hayter’s attempts to get letting agents recognised in law as estate agents.

Andrew Gwynne, Labour MP for Denton & Reddish, spoke of his cousin Alison, a mother of two whose marriage had broken up. He had been with her to various letting agencies two weekends ago, but as soon as the words ‘housing benefit’ were mentioned, agents closed their portfolios and all that was available was poor-quality accommodation “at extortionate prices”.

One Tory MP who did support the idea of longer, ‘more family friendly’ tenancy agreements was Jake Berry, for Rossendale and Darwen. He suggested six-year terms with rent reviews and rolling break clauses. But, he said, it wasn’t necessary to change the law to achieve this.

Labour lost their proposal by 292 votes to 225. The Government’s amendment was passed by 284 to 220.

Yesterday’s debate was at short notice, but housing charity Shelter lost little time in mustering support, asking its supporters to email their MPs.

Shelter said: “Private renting is the worst of all worlds. Rising rents. Poor conditions. And soaring letting agent fees.”

A Shelter blog on Homes for London stepped up the pressure by saying: “Letting agent fees are out of control.”

Article courtesy of Letting Agent Today

RentPro property management software for letting agents and landlord.

You may also like...