Tuesday evening MPs voted against Labour’s proposal to ban letting agent fees, with 281 MPs voting against and 228 for the amendment. The proposal was placed as a last minute amendment to the Consumer Rights Bill which is currently working its way through Parliament.
However, letting agents will now face a new obligation to display full details of their fees both on their websites and in their offices.
Earlier in the day, during Deputy Prime Minister’s questions, Harriet Harman, Labour’s Deputy Leader, called on Nick Clegg, Deputy Prime Minister, to back her party’s amendment to the Consumer Rights Bill to ban agents from charging fees to tenants. But the Liberal Democrat leader said that prohibiting fees could push rental prices higher in the long run – a view shared by many letting agents across the country.
Mr Clegg insisted that greater transparency would help to keep tenants’ costs down and announced new obligations on agents to publish details of the fees that they charge in their office and on their website, enabling tenants to “shop around” in order to secure the “best deal available”. Harriet Harman dismissed this as simply “not good enough.”
However, Mr Clegg did suggest that the Government would be willing to work with Labour on its proposals for longer term tenancy agreements, which Ms Harman said was important for those tenants seeking “security and continuity”. She said that it was time to “move from one-year tenancies with unpredictable rents to three-year tenancies with predictable rents.”
Clegg responded by revealing that the Government was working on what he described as a “model agreement” to help tenants seeking longer fixed-term tenancies.
Emma Reynolds, Labour’s Shadow Housing Minister, speaking ahead of yesterday’s Commons vote, said, “Homebuyers rightly don’t have to pay the estate agent who is working on behalf of the seller of the property. However, in contrast, renters have to pay to get the keys to their rental property. The average upfront fees are £350 but in high demand areas, these fees can be much more expensive.”
Housing Minister, Kris Hopkins, described Labour’s effort to get Liberal Democrat and Conservative MPs to support their proposals to end tenant fees as a “short term gimmick” that could have led to “higher rents by the back door.”
He remarked, “Excessive state regulation and waging war on the private rented sector would also destroy investment in new housing, push up prices and make it far harder for people to find a flat or house to rent.”