Letting agents 'must publish fees' says minister

Transparency: Willott hopes the move would help deter double-charging and enable tenants and landlords to shop around

16 June 2014

Tenants will be able to "shop around" for a letting agent that does not charge excessive fees under Government plans to fine those that do not display their costs, Consumer Affairs Minister Jenny Willott has said.

Introducing changes to the Consumer Rights Bill, the Liberal Democrat minister said tenants would get a "fair deal" from the plans and an approved complaint and redress system would be set up to tackle failings.

She rejected Labour calls for a ban on excessive agent fees for tenants, claiming these would cause landlords to push up rents to cover the costs they would be hit with as agencies try to make up the lost revenue.

Introducing Government amendments to the Bill during its report stage, Ms Willott told the Commons: "An outright ban will 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 their fees and charges readily available, this will for the first time introduce a financial penalty when an agent fails to display their fees.

"We are introducing legislation which will require all letting agents and property managers to belong to an approved redress scheme. This will give tenants an effective way to address complaints about fees as well as more generally where the tenant is not happy with the agent's performance."

Ms Willott said administration fees will have to be broken down into individual costs to show what they cover and repeat fees, such as charging for a tenancy renewal, would need to be published.

The regulations would be enforced by local authorities.

Ms Willott said: "We don't want to see rents go up as that would cause widespread problems for, as you said, a large number of people across this country who rent in the private sector.

"We want to protect those tenants so that they don't see their rents go up but instead they get a fair deal from agencies and that they are able to see what the charges are so that we can see some openness and that there is proper redress in place to ensure that they get a fair deal."

Shadow consumer affairs minister Stella Creasy claimed prospective tenants do not shop around for a letting agent which charges less in fees but simply look for a home.

The Labour frontbencher said more information and transparency would not help tenants being hit with excessive fees.

Ms Creasy said: "Information, whilst welcome, is not enough to deal with the fundamental problem which is the impact of these excessively high agency fees on people's ability to rent a property.

"As we said at the report stage this is a bit like telling somebody who is tied to the train tracks the timetables for the trains.

"The fundamental issue that we have to deal with here is the consequence of agents being able to charge these kind of fees to tenants."

She went on: "Do you accept the case that there can be fees that are detrimental and it is appropriate for the Government to intervene or are you simply saying that if a letting agency wants to charge you £700 a time to renew your tenancy it's fine as long as they've told you about it?

"I'm sure that's not your intention. I'm sure you recognise that people do not shop around for a letting agency, they shop around for a property. They try to stay in a home to keep a roof above their heads, to keep with their families, and that therefore these sorts of costs are unacceptable because they are causing detriment to consumers."

The Government's amendments to make letting agents publish their fees and set up a redress system were passed unopposed.

Labour's amendment which would have brought in a ban on fees detrimental to consumers was defeated by 259 votes to 204, majority 55.

Letting agents 'must publish fees' says minister

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