Consumer Rights Bill

John Bercow Excerpts

Monday 16th June 2014 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

Government new clause 25—Letting agents to which the duty applies.

Government new clause 26—Fees to which the duty applies.

Government new clause 27—Letting agency work and property management work.

Government new clause 28—Enforcement of the duty.

Government new clause 29—Supplementary provisions.

New clause 30—Letting Agents: Report—

‘Within three months of Royal Assent of this Act, the Secretary of State shall prepare and publish a report, and lay a copy of the report before Parliament, on—

(a) the consumer detriment caused to tenants by letting agent fees and the impact this has on the ability of tenants to secure and maintain tenancies, and

(b) the steps that the government intends to take to prohibit fees that cause detriment to tenants.’

Government amendment 23.

[Jenny Willott]

We know that consumers in the private rented sector are especially concerned about the fees charged by letting agents, particularly when they are unexpected or unreasonably high. There are calls for a ban on letting agents charging fees to tenants, but I am concerned, as we discussed on the previous debate on Report, that an outright ban would simply increase the pressure on rents. Making agents publish their fees is a better approach, giving consumers the information they want and supporting good letting agents. Such transparency would deter double charging and enable tenants and landlords to shop around, which would encourage agents to offer competitive fees.

The vast majority of letting agents provide a good service to tenants and landlords, but we are determined to tackle the minority of rogue agents who offer a poor service. Although good agents already make information about their fees and charges readily available, the new clause will introduce, for the first time, a financial penalty when an agent fails to display their fees. We are introducing legislation that will require all letting agents and property managers to belong to an approved redress scheme. That will give tenants an effective way to address complaints about fees, as well as, more generally, when the tenant is not happy with the agent’s performance.