Tenant fees are out of control – I’ll work with renters to deliver a better deal

While it’s right that we tackle unfair lettings fees, the Government’s new bill doesn’t go far enough to protect private renters.


On Monday I spoke in the debate about the new Tenant Fees Bill – a draft law which proposes a ban on unfair letting agent fees and a cap on deposits.

The scandal of letting agent fees has gone on for far too long. An audit of the private rented sector in Brighton and Hove shows exactly how out of control the fees are. In Brighton, agents’ fees start at £500 just for a holding fee which is currently non-refundable. If someone decides not to go for the property, they lose the money.

In contrast, when buying a house, someone can put in a bid for a property, agree an offer and get very far through the negotiations – and then drop out with no financial charge. That seems manifestly unfair: one rule for homeowners; a different, unfair one for renters.

In Brighton, admin fees are also common, as high as £250 per tenant. Tenant substitution fees are as high as £420, and guarantor fees go up to £190. All in all, it costs more than £1,000 before even getting started on the deposit. During the debate, we heard the same story from many constituencies throughout the country, particularly those in the south-east. We also have check-in and check-out fees, which are as high as £270 per check-in or check-out.

How did it get this bad? There is a fundamental power imbalance in the landlord-renter market. Often, young and insecure workers have no choice but to take what they are given, pay the fees and, sometimes, to do it with a smile because otherwise they would be rejected by the landlord.

Across the country, this power imbalance means renters are starting to take matters into their own hands, with renters coming together to form unions and campaign groups. In my constituency, for example, Acorn (the local renter union) are doing amazing work to stand up for renters who are being abused by their agents.

Brighton is also pioneering more co-operative solutions with local universities and student unions setting up mutual letting agents. These are good, but without the capital clout and refusal to play dirty such as charging tenants fees, landlords are less likely to list with them and is why it’s so vital to legislate against the sharp practices of more capitalistic agents.

Working with them and other groups of renters, I can see that sadly the situation is much worse than the Government would have us believe – rather than just a few rogue lettings agents, in Brighton the problem is certainly more widespread. Most agents I hear about use dirty tactics to charge higher and higher fees.

That is why action is needed; it is not about a few rotten apples but a systemic failure in the market. And while I support the measures in this Bill, I hope it can be improved to be far more ambitious.

As it stands, the current draft provides ample loopholes for agents and landlords to continue charging unfair and arbitrary “default fees”. We still have no-fault evictions, and when a landlord decides to evict a person with notice they are not subject to a charge or fee and the person losing their home gets no reimbursement – so default fees on the other side are totally unfair. If the Bill introduced an equal fee for no-fault evictions, some of the default fees might be more acceptable. Others are simply poorly defined loopholes, allowing agents and landlords to use them to their best advantage. For example, the current drafting would allow unrestricted and unregulated fees for anything from lost keys to replacing a dustpan and brush.

This Bill is not the first time that the Conservatives have borrowed ideas from Labour’s manifesto. In 2015 we pledged to ban unfair lettings fees, and last year our manifesto went even further, with additional promises to make three-year tenancies the norm and a new inflation cap on rent rises.

Similarly, the Co-operative Party’s work on housing last year put forward ambitious proposals for new consumer rights for private tenants and a housing watchdog to hold landlords and agents to account. It includes a new voice for private renters so that they can ensure future government policy meets their needs, and new regulatory standards which define minimum standards for privately rented homes

While it’s disappointing that the Bill falls short of these ambitions – I’ll continue to work with renters to secure a better deal.