MPs have defeated an amendment to the Consumer Rights Bill that would have banned letting agents from charging fees to tenants.
In a vote at 7.30pm on Tuesday, 228 MPs voted to ban fees, but 281 voted against the proposed new clause – a margin of 53. All but three Conservative and Liberal Democrat MPs present voted against the fee ban.
Labour member for Walthamstow Stella Creasy tabled the opposition's motion in an effort to prevent agents charging fees to both landlords and tenants for the same transaction. She described it as “a fundamentally anti-competitive corporate practice”.
Earlier this week the coalition Government outlined its own amendment, which it says would see letting agents face fines if they fail to publish full details of fees charged to tenants.
Unsurprisingly the outcome of the vote went down well with letting agents.
Ian Potter, managing director of the Association of Residential Letting Agents (ARLA), said: “Labour’s amendment was ill thought through and its failure to pass illustrates this. I'm glad that the majority of MPs recognise that a ban on letting agent fees will only lead to an increase in rents, as landlords and agents seek to achieve returns. Fees are not arbitrary or unnecessary; they represent a business cost that those tabling the amendment failed to recognise. ARLA’s call, as ever, is for wholesale regulation of the market to ensure fair and transparent practices for all consumers, landlords and agents alike.”