Letting Agent Fees (Tenants)

Debate between Kevin Hollinrake and Rupa Huq

Wednesday 6th September 2017 Westminster Hall

[Kevin Hollinrake]

I like to think, although I have no definitive evidence, that a dynamic market has been created. New entrants have come into the market that are willing to work harder and provide different, more efficient services. Some agents will find it difficult and there will have to be job losses, but hopefully those jobs will be transferred to new businesses that come into the market and compete. We should see this as a definite challenge, but also as an opportunity within the sector.

One of the biggest concerns is the unintended consequences, particularly for tenants on low incomes. Agents are allowed to charge tenants for very important services such as references and inventories, but in future they will not be, so the costs will be borne by the letting agent. When faced with a tenant whom we might call borderline—somebody who is on a lower income, who might fail a credit check or who is on housing benefit—the letting agent may not want to carry out a reference check, if they will not get paid for if the tenant fails it, so they may plump for a safer bet. This may result in some tenants being unable to rent the properties they seek.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

I draw the hon. Gentleman’s attention to a quotation from an article in The Daily Telegraph on 27 August. This touches on the point that my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) made about young people. Does he agree with this?

“If you are under 35, it’s likely there is little chance of you ever owning your own home. No doubt you are also fed up of living in overpriced rented accommodation, often of a standard that can best be described as a dump.”

Is this not part of a wider malaise? Our leader would be proud of that article, since a lot of it seems to be pilfered from the 2015 Labour manifesto.

[Kevin Hollinrake]

Well, nobody has a monopoly on the best ideas. The Government absolutely believe in the power of market forces and want to ensure that they apply universally. However, I do not recognise the hon. Lady’s description of the private rented sector. There are 4 million properties in that sector in the UK, of which about 1 million—a significant number, but a minority—are considered substandard. I will move on later in my speech to how we might deal with properties of substandard quality and condition, but I do not recognise them as characteristic of the industry, of landlords or of agents.

[Dr Huq]

I neglected to say that the article I mentioned was written by the Minister’s former colleague Rob Wilson, the former MP for Reading East who was defeated at the last general election. He writes that the Conservatives should get a grip on housing if they are ever to win again.

[Kevin Hollinrake]

That is exactly the purpose of this legislation. I will move on shortly to how we tackle substandard properties, but the point is that they are a minority. The hon. Lady characterises rented properties as universally substandard; I do not accept that at all. When I started in the industry 30 years ago, the only homes for rent in the middle of York were shabby, damp, dark terraced houses. There was very little choice in the private rented sector. Since then, the private sector has delivered excellent accommodation throughout the country. Yes, there are difficulties, including rogue landlords and rogue agents, and we need to deal with them. The Government have legislated and are legislating on that basis.