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September 6, 2017 Featured on home page 3

Daisy at Westminster Hall – The Tenant Fees Debate

Kevin Hollinrake MP, founder of Hunters Estate agency, sponsored a debate at Westminster on 6th Sept 2017 on the proposed ban on fees to tenants by agents and landlords.

Founder of Daisy Lets & Sales, Claire E, was there in person for the debate to see for herself first hand how balanced the debate was, and you can now watch it for yourself here.

Claire Empson in Westminster Hall

Most agencies were in favour of a sensible level cap, in recognition that there are some out there that currently charge vastly over what is fair and reasonable – but the idea of a cap was laid to rest by the housing minister Alok Sharma who said it would be “too confusing”. His team are working with industry stakeholders on a ‘How to Let’ Guide to go with the already existing ‘How to Rent’ Guide to guide landlords. 

Westminster pass

Various views were expressed by both sides of the argument, some MPs had done more extensive pro active ‘on the ground’ research than others who had just relied on newspaper articles or spoken to constituents dropping into their surgery. The MP for Both West Norfolk, Henry Bellingham, had actually spent the day in a local agency to him and had taken on board how much work is involved in the referencing process and associated paperwork, he said he feared unintended consequences to a decent local business and rent levels if landlords pass on the costs by increasing the rent, and stated he had had no complaints locally about letting fees.

Increasing rent levels will hit the loyal tenants that don’t move regularly as they will be paying the increase throughout the tenancy, whereas they would have only paid up front fees once. The ban on fees will only benefit those tenants that move at the end of each fixed term and would normally pay fees each time.

Other issues were brought up – such as the need to make sure all inventories are independent – not done by landlords, a cap on security deposits is suggested of one month, holding deposits of one week. Insurance backed deposit schemes also came under fire, and a ban was mooted in favour of compulsory Custodial Schemes only. At one point however it had to be explained to him how the current schemes actually worked as he had got it wrong!

David Cox, chief Exec of ALRLA Propertymark commented : 

“We welcome this morning’s comments from Kevin Hollinrake MP around the unintended consequences of a total ban on letting agent fees.”

“It’s important that the government understands the value of the services agents carry out for both landlords and tenants when shaping its final legislation.” 

“We are therefore disappointed in Alok Sharma’s comments today declaring that the government’s position remains that all fees will form part of the ban.” 

“As Kevin acknowledges, the ban on fees for referencing checks will cause problems. Agents are required to carry out these checks by law, and they invest both time and resources to ensure this work is carried out properly.” 

“The government must now consider exempting referencing checks from the ban as well,” he concluded.

A ban on tenant fees will go ahead, the consultation has finished, the industry awaits a date – it is expected to be within the next 12 months.

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