London mayor Sadiq Khan has called for the fees ban to go much further than is currently proposed.
The Tenant Fees Bill is next due in Parliament on September 5 for its report stage.
But Khan said the Bill must go further to end “rip-off” fees and extortionate deposits.
He said it had been watered down and was a missed opportunity to protect the 2.4m private renters in London.
He said London tenants need to find nearly £3,700 each time they move home, compared with a nationwide average of £2,000.
Khan wants to see deposits capped at no more than three weeks’ rent.
But he said that despite ministers earlier promising a cap of four weeks, they have backtracked and now propose six weeks, a measure not supported by any organisation representing renters.
In addition, he said the Bill contains loopholes that mean letting agents could still end up charging tenants excessive fees – now spread throughout a tenancy rather than charged up-front.
Khan said the Bill formalises agents’ ability to charge renters for basic services – such as responding to emergency call-outs – that should be covered by the management fee landlords have already paid.
Khan said these measures mean the Bill “opens the door to an entirely new culture of exploitation”.
As the Bill is passes through its parliamentary stages, the mayor is calling on ministers to make amendments by:
- capping rental deposits at three weeks’ rent, and capping holding deposits at one day’s rent;
- scrapping provisions for new and potentially exploitative ‘default fees’ to be written into tenancy agreements, and for ‘charges to enact a change of sharer’ which will fall disproportionately on renters living in shared housing; and
- increasing the penalties councils can charge for illegal fees to £30,000
- enabling tenants to directly claim back prohibited payments along with compensation worth up to three times the fee paid.
Khan, said: “Rising rents, ongoing insecurity, and in too many cases poor quality housing make the 2.4m private renters in London amongst those worst-affected by the housing crisis.
“By backtracking on proposals and watering down the strength of this Bill, Ministers are in danger of opening the door to an entirely new culture of exploitation, with the legislation left unfit for purpose and simply a missed opportunity to truly help renters.”
Earlier this year Khan launched his Rogue Landlords and Letting Agents Checker, which allows Londoners to check if the landlord or letting agent of a rental property has been convicted of any housing offences.
All 33 London local authorities have signed up to the tool – the first of its kind in the country.