Hunters founder-turned-Conservative MP Kevin Hollinrake was among MPs who helped the Tenant Fees Bill sail through its report stage and third reading yesterday, despite admitting it would lose him money.
Speaking during the latest debate on the Tenant Fees Bill, Kevin Hollinrake, MP for Thirsk and Malton, referred to Hunters, admitting “the legislation will cost me more than I care to think of” and that it “kept the finance director awake at night,” but said he still backed the backed the legislation.
He said: “A tenant chooses a property, they have no choice about who their lettings agent is.
“There is not currently a free market here.”
His views came as the Government put forward several amendments to the Tenant Fees Bill – with the main change clarifying how default fees can be charged, with landlords and agents required to produce receipts and invoices.
ARLA Propertymark said it was “disappointed but unsurprised” that the Bill passed.
David Cox, chief executive of ARLA Propertymark, said: “Over the summer, we worked with Daniel Kawczynski MP on his amendment to allow agents to charge up to £300.
“Although the amendment was unsuccessful, this shows that members involved in ARLA Propertymark’s campaign have helped MPs understand the unintended consequences of the tenant fee ban; with some MPs listening to the legitimate concerns of the industry. As the Bill moves into the House of Lords we will continue working to ensure Parliamentarians understand the impact the ban will have on the whole private rented sector.”
MPs voted against calls from Labour to increase the maximum fine for ban breaches from £5,000 to £50,000, but overall most supported the Bill across the House of Commons.
However, the Government still faced criticism from some of its own party members.
Kawczynski, Tory MP for Shrewsbury and Atcham, said the Bill was in opposition to Conservative values.
He said the party was about “less regulation, less red tape and less taxation to empower entrepreneurship,” claiming the ban did the opposite.
Kawczynski suggested a cap would have been better, claiming the ban calls into question whether the Conservatives are a pro-business party and tips the balance in the sector towards the tenant.
He added: “There is a fear that the fees will just go on to the rents, which is less transparent.”
A fellow Tory, Sir Christopher Chope, MP for Christchurch, described the Bill as a “direct attack on lettings agents,” asking how charging tenant fees was different from doctors charging for writing letters.
He said the Bill would not be needed if laws were properly enforced.
Chope said the legislation was “not a Conservative Bill” and described it as an “exercise in socialism and control”.
He said: “It is already difficult for tenants on housing benefit or those without clear citizenship to rent and these things will become a lot more difficult.
“There is too much crowd pleasing on the part of the Government and not enough recognition of those in the private sector.”
In one of the main changes, the Government rejected calls to ban default charges as part of the tenant fee ban, but the Bill will require landlords and agents to provide proof of their costs.
The Bill originally said tenants could be charged a reasonable default fee for any item as set out in a tenancy agreement, such as replacement keys.
But Parliamentary Under-Secretary of State for Housing, Communities and Local Government Rishi Sunak told MPs yesterday that a landlord or agent will only be able to recover “reasonable incurred costs” and must provide evidence to the tenant before they can impose any charges such as an invoice or receipt.
In a further change, landlords and lettings agents will have to repay unlawful fees within seven to 14 days, as determined by an enforcement authority.
The Government also clarified that tenants could still pay for the services of a relocation agent as long as the firm isn’t working for the landlord who ends up housing the renter.
Sunak told MPs: “This Bill is not about driving agents out of business.
“It is about levelling the playing field so the small minority of bad actors can’t continue at the disadvantage of the of majority who do a valuable job.”
During the debate, shadow housing minister Melanie Onn was forced to deny that the Labour Party wants to see the end of the entire private rented sector
This was after Kawczynski disclosed that a Labour politician had told ARLA Propertymark that the entire private rental sector (PRS) should be banned.
Kawczynski said: “One newly elected Labour member, who I will not name, said ‘I am not interested, I want the whole private sector banned’.
“That is the sort of prejudice we are having to deal with and it is important the private rental sector is supported.”
Onn insisted a ban on all agents and private landlords is not official Labour policy.
She said: “There is no suggestion to do away with the PRS. This is about shifting the balance a little bit more in favour of tenants who so far have had a very bad deal.”
Speaking as the Bill progressed through its third reading, Housing Secretary James Brokenshire, insisted the changes would create a “level playing field” for lettings agents against rogue firms.
He said: “Agents who offer good value and high quality service will continue to be in demand and play an important role.
“This is about creating a professional and affordable private rented sector for tenants and also decent professional lettings agents providing a vital service.”
The Bill will now be considered by the House of Lords. No date has been given for when the ban will come in but it is expected to be next April.
This will go down well with Hunters Franchisees.
The fee ban will clean up the lettings market I suppose.
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The ban wont clean up the lettings market as i fear that like with so many other housing market issues, it wont be enforced and tenants wont be educated enough into what they can and can not be charged for.
Our housing minister shows a lack of understanding. This should not be about tipping the balance in favour of the tenant, it is about making the whole situation favour, tipping anything in anyones favour is not making the situation fair, but bowing to a certain group of individuals in the hope of winning votes.
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Hollinrake is just crowd pleasing to show he’s unbiased. Hunters are one of the worst for fees, and lots of them!
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How he can call himself a Conservative, I have no idea!
Typical crowdpleaser from ex estate agent turned MP – look at Andrew Mackay.
Someone said recently is tipped to be next housing minister – let’s hope not!
I’m all for freemarket economic‘s, but as the MP from Shrewsbury said, why is this Conservative party obsessed with regulation & redtape – it doesn’t help anybody; tenants or agents.
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I appreciate that this comment will be unpopular but I for one applaud the integrity of Kevin Hollinrake who is clearly prepared to vote on what he feels is right and proper for his constituents and the country – even though his decision may be detrimental to his ownbusiness interests.
I may or may not agree with him but he is prepared to vote for what he sees to be right. I wish all members of parliament showed a similar approach.
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So which Hunters branch do you run?
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Lol…
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Here Kevin supports a fee cap and is against a fee ban; http://www.propertyindustryeye.com/hunters-founder-mp-kevin-hollinrake-case-for-capping-letting-agent-fees/
I just cant see how anyone who understands our industry can support an outright fee ban, there is no doubt that tenants will pay more in the long run. Landlords planning to exit the market and professional agents under extreme pressure will not help tenants. How can anyone believe what is happening is good for tenants?
I have not met a single industry professional who is against forcing the rogue agents and landlords out of the market, this proposed legislation is not the answer. Chaos lies ahead……..
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This policy and decision is a knee jerk reaction from a group of people with no industry experience a who have probably never had to see how the ‘other half lives’ either in business or the unfortunate people who can only scrape by month to month (excluding mr hollinrake who has industry experience but I can imagine is not wanting to upset his superiors especially as someone has said he is being lined up as the next housing minister).
We are already seeing less rental properties on the market due to landlords selling up due to the hatched job the government have done to them, which is increasing rents and lowering availability. Banning fees outright is just ridiculous, tenants need to get referenced, just the same as someone needs a credit check and affordability for a mortgage, who’s going to pay for that now? The agents? Then fees will go up to the landlord and then rents will increase; or will it go to the landlord and then once again rents will increase. They should have set a flat fee per applicant as an industry standard.
how many of us have sold a property with a tenant in or let out a property where the tenant is vacating due to the rent increase and they have been told by the council to not leave voluntarily as if they are evicted they will be in ‘housing need’ and therefore go to the front of the queue? This costs landlords 000’s of pounds and also wastes the agents time and money as well, we will see a lot more of this in the months and years to come with these policies.
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Double standards. We recently applied for Anti Money Laundering Registration with HMRC and after paying £230 ‘administration’ fee were subsequently faced with a further £200 demand to take up references on our nominated four ‘responsible’ persons. Why is enquiring if a tenant is a responsible person any different?
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Excellent point!
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In fairness to Kevin this was less of a debate and more an announcement. The decision had already been made and industry was told in no uncertain terms to work with Government and not against them. Playing the political equivalent of King Canute wont get you the concessions that were made and will hand the momentum to Shelter and Generation Rent.
Reasonable default charges and 6 week cap on deposits being two such points. Also, bear in mind that this has nothing to with anything other than currying favour with voters. Remember also, we still have the House of Lords debate to come.
In respect of the apparent scrapping of 3 years tenancies, a senior government source reported in the Sun made no reference to the perceived benefit to tenants and instead said ‘It’s a real election winner and they are going to blow it’. This illustrates Government mindset over the pro tenant legislation.
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Probably somebody in the corridors off power whispered in his ear that it was a good message to get out on behalf of the party …. probably end up with a peerage in the next few years
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Hmmm – Turkeys voting Christmas?
What or where is the fiduciary care to tenants coming from following a fees ban? If they’re not paying for a service, what duty is owed to them?
And who the bl00dy hell dictated that tenants should be banned from paying for a service that they need and are willing to pay for?
It’s true unscrupulous agents have charged exorbitant fees in the past but most charge a reasonable fee for a reasonable service – capped fees are the only fair option. Especially when we all know there’s no such thing as a free lunch – tenants will pay in the end and the likelihood is it will cost a lot more.
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Rents will rise, fact!
Landlords will incur some extra costs, a large multi-branch agent will benefit from both these rises, and as such the tenant fee ban will not impact them as much as a small independent.
They will find it hard, some will close leaving their Landlords looking for other agents, and the agents that will be left to mop up the mess = the large multi-branch agents with spare capital.
Letting agents will become generic, just like the banks with the same branches on every high street.
The government will benefit from increased tax revenue from higher rents, I won’t do the maths again as I’ve already done that here, but I estimate tenants to be £600 worse off over a 12 month period than before the fee ban (based on our average fee structure).
As usual it’s all smoke & mirrors with legislation thrown in to prevent exposure of the actual truth of it all.
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