The lettings fee ban will happen but legislation has been introduced in draft so it can be properly scrutinised by all parties, the housing minister has said.
In one of his first appearances discussing housing and agent issues in the House of Commons, Alok Sharma said the lettings fee ban consultation had received more than 4,700 responses so had to be property scrutinised.
Speaking at a Westminster Hall debate yesterday on the fee ban, called by Conservative MP and Hunters co-founder Kevin Hollinrake, Sharma said: “The lettings fee ban will deliver a more competitive, affordable and transparent lettings market.
“A good lettings agent provides a valuable service – the problem is they are chosen by the landlord.
“It is important to ensure the fee ban is carefully considered.”
He failed to give a date on when the draft tenant fee bill would be introduced despite concerns from MPs over how long it is taking, merely saying it would come “soon”.
Hollinrake used the debate to back the ban but warned of “unintended consequences” such as costs being passed on to landlords and rents rising or agents rejecting tenants with poor or complicated credit if they have to bear the cost of referencing them.
He also said enforcement needed to be better and called for penalties for landlords and agents flouting rules to be increased to £30,000, something Sharma appeared to suggest he would consider.
Sharma rejected claims that rents would rise as a result of the ban, claiming that many fees charged were already unnecessary and excessive, adding: “We will keep the impact of the ban under review.”
Most MPs during the debate backed the ban and raised issues with the state of rental accommodation and level of rents charged.
Siobhain McDonagh, Labour MP for Mitcham and Morden, said tenants were “lost in the housing crisis” and warned that councils don’t have sufficient funds to enforce rules on rogue agents and landlords.
Charles Walker, Tory MP for Broxbourne, raised another issue of self-letting landlords being able to use insured schemes to hold on to a tenant deposit at the end of the tenancy and leaving the tenant to challenge it with a dispute service.
He later clashed with Sharma over whether this was the case and the housing minister promised a meeting on this subject.
In a rare show of support for agents, Norfolk MP Sir Henry Bellingham said he had heard no complaints about fees in his constituency and warned against creating a “blunt instrument” based on issues in big cities such as London.
Commenting on the debate, David Cox, chief executive of ARLA Propertymark, was disappointed to see Sharma holding firm on the ban.
Cox said: “It’s important that the Government understands the value of the services agents carry out for both landlords and tenants when shaping its final legislation.
“We are therefore disappointed in the housing minister’s comments declaring that the Government’s position remains that all fees will form part of the ban.
“As Kevin Hollinrake acknowledges, the ban on fees for referencing checks will cause problems. Agents are required to carry out these checks by law, and they invest both time and resources to ensure this work is carried out properly. The Government must now consider exempting referencing checks from the ban as well.”
National Approved Lettings Sscheme CEO Isobel Thomson said: “NALS welcomed the cross-party debate on the fee ban and confirmation that the Minister has adopted a common sense approach on holding deposits with his announcement that they will be exempt from the ban but he gave no clear indication of when legislation might come forward.
“We were encouraged that MPs quite rightly expressed concern about the implications of rent increases as a result of the ban and the impact on those least likely to afford them. Of real interest was the minister’s commitment to consider the ban on tenant fees in the context of wider work in the private rented sector, something NALS called for earlier this year.
“This is positive news and an indication that he has listened to the call for an end to piecemeal legislation. His clear reference to regulation was welcome as well as his willingness to explore options for what a regulatory framework might look like.”