Letting Agent Fees and Deposits: Private Rented Sector

Caroline Ansell Excerpts

Tuesday 3rd May 2016 Commons Chamber

[Maria Caulfield]

I thank my hon. Friend for his points. I am sure he will hear some of those suggestions in my recommendations.

The Government have done a tremendous amount to protect tenants and restrict over-exuberant letting agents. Last year, they made it illegal for agents to charge potential tenants to register with them or to charge for providing lists of properties. The Government also changed the law so that agents have to advertise their fees publicly in advance, both online and in their offices; non-compliance is enforceable by local trading standards officers, with a maximum fine of £5,000.

That change is very welcome, but in reality the law is not being followed. Again, my enthusiastic bunch of volunteers at the citizens advice bureaux did a form of mystery shopping locally. They visited 10 letting agents in Lewes and 15 in the town of Seaford. Of those 25, only one had its fees easily and publicly displayed. In practice, then, tenants are none the wiser that there is such a difference in fees between letting agents in the same town.

I therefore have five asks of the Government to ensure further protection for those who find themselves part of generation rent—very often those who cannot afford to buy a property or get a mortgage. First, we should indeed cap letting agent fees, because there can be no justification for the difference in the fees currently charged. Secondly, we should set standards for what can and cannot be charged for. For example, is it right that tenants are charged a holding fee that does not actually hold the property they want and that is not refundable? Thirdly, we should end the practice of charging for tenancy renewal, or at least give greater protection to tenants on short-term lets.

[Caroline Ansell (Eastbourne) (Con)]

Does my hon. Friend agree that short-term lets of six months are not only hugely costly to tenants in what should be a straightforward renewal—there should also be much more openness about the possibility of having a longer tenancy agreement—but undermine people’s sense of security and their connection to their community?

[Maria Caulfield]

I agree with my hon. Friend, because tenants have a legal right to ask for longer tenancy agreements, but often that request is not passed on to their landlords.

Fourthly, there should be tougher penalties for not displaying fees, because that is clearly being flouted. I urge that councils should be allowed to keep the money from any fines to encourage them to enforce the law that already exists. Fifthly, we should promote this issue so that tenants are aware that there is a difference between the fees that are charged, often on the same high street for the same properties. I have written about that in my monthly column in the Sussex Express in order to highlight the issue so that tenants are aware and can then make choices for themselves.

In conclusion, letting agent fees have the greatest impact on the young, the poor and those excluded from the housing market. Many letting agents know that these people are desperate to secure somewhere to live and take full advantage by charging exorbitant fees. There is huge competition for housing, particularly in London and the south-east, and if someone refuses to pay these fees there are three or four people behind them in the queue who will. I urge the Government to step in and protect tenants from the scourge of letting agent fees.