Private Rented Sector
Debate between James Morris and Emma Reynolds(10 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
Emma Reynolds
In a minute.
Often both landlord and tenant are charged for exactly the same service, which is otherwise known as double charging. I am afraid that it is not just a matter of a few rogue letting agents; it has become widespread bad practice throughout the industry. Mystery shopping conducted for the Labour party established that some tenants were being charged up to £450, and Shelter found that some were being charged as much as £700.
Emma Reynolds
In a minute.
Those fees have included the charging of hidden sums for inventories, references, check-outs and renewals, in addition to the large amounts of money that people must find for the payment of rent up front and deposits. One in four people must borrow money in order to pay the fees and obtain a home.
Emma Reynolds
In a minute, if the hon. Gentleman will be patient.
When a first-time buyer buys a property, that buyer does not pay the estate agent. The seller pays the estate agent, because the estate agent is working for the seller, in much the same way as the letting agent is working for the landlord. If first-time buyers do not pay to obtain the keys to their first homes, why should tenants have to pay £450, £700 or more in order to obtain the keys to theirs, when they are having to pay rent and a deposit?
Emma Reynolds
I will give way to the hon. Gentleman, who has been very patient.
James Morris
I understand what the hon. Lady is saying about the need for transparency in regard to letting agents’ fees, but some commentators have pointed out that one of the unintended consequences of her policy would be an increase in rents. In Scotland, which has introduced the policy, rents have risen by a greater proportion than in any other regional country in the United Kingdom. What does the hon. Lady make of that?
Emma Reynolds
I simply do not agree with the hon. Gentleman. According to Shelter, which conducted a survey of letting agents throughout Scotland, there is no evidence—[Interruption.] I allowed the hon. Gentleman to intervene; perhaps he will have the politeness to listen. The survey by Shelter established that, since 2012, landlords in Scotland were no more likely to increase rents than landlords elsewhere in the United Kingdom.
What the hon. Gentleman and other Government Members must ask themselves is this: is it reasonable for letting agents to charge whatever they want to charge? For that is exactly what is happening. Is it reasonable for a letting agent to charge £300, £400 or £500 for inventories, references, and all the other things that the landlord needs, because the letting agent is working for the landlord? And guess what? The landlord is paying a percentage—usually 8% or 10%—in order to pay management costs to the letting agent. It is not as if the letting agent is not getting any money out of the transaction.
We are merely suggesting that, given that the tenant does not shop around for a letting agent—the tenant shops around for a property—the tenant should not have to pay the fees. If Government Members want to set their faces against Generation Rent, let them go ahead and see what the electoral consequences are.