On the 5th of September, the lettings fee ban was discussed in a Westminster Hall debate, called by Conservative MP and Hunters co-founder Kevin Hollinrake. Alok Sharma, Minister of State for Housing and Planning, explained that the lettings fee ban consultation had received more than 4,700 responses and needed to be properly addressed and scrutinised to ensure proper implementation.
Sharma was unable to give a date on the introduction of the draft tenant bill, saying it would be introduced ‘soon’, despite MPs’ concerns over the length of time it was taking. Hollinrake backed the ban in the debate but expressed his concerns over ‘unintended consequences’, such as landlord’s experiencing higher costs, increased rents for tenants or agents rejecting tenants with a poor credit history. He also called for penalties to be higher- as much a £30,000- for agents and landlords flouting the rules, which Sharma suggested he would consider.
Sharma rejected claims of increased rents because of the fee ban, instead taking the view that fees currently charged are unnecessary and excessive but added that the impact of the ban will be kept under review. The majority of MPs at the debate also backed the ban and raised issues with the quality of housing in the PRS and rising rents. Charles Walker, Tory MP for Broxbourne, clashed with Sharma over his concerns that self-managing landlords could use insured deposit schemes to hold on to a tenant deposit at the end of the tenancy, leaving tenants to challenge it with a dispute service. Siobhan McDonagh, Labour MP for Mitcham and Morden, raised concerns over tenants being ‘lost in the housing crisis’ and warning that local authorities don’t have sufficient funding to tackle rogue agents and landlords.
David Cox, chief executive of ARLA Propertymark, has been at the forefront of concerns over the fee ban, commenting;
“We welcome this morning’s comments from Kevin Hollinrake MP around the unintended consequences of a total ban on letting agent fees, including higher rents for tenants as landlords seek to recoup their costs. This is something ARLA Propertymark has warned against for some time. We commissioned independent economic analysis earlier this year, which showed the average tenant will see their rents increase by £103 on average per year as a consequence of a full ban.
“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 the Housing Minister, 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.”