MPs heard the second reading of the tenant fee bill yesterday in the House of Commons, where it was debated and approved without a vote.
The bill was presented by the new Housing Secretary James Brokenshire, who announced it as an ‘essential measure to promote fairness in the private lettings market,’ and described it as a bill that ‘all should welcome.’
And welcome they did.
A selection of the comments from the House highlight the positivity in Westminster for the upcoming legislation, however they do suggest that many of the MPs have the same concerns that landlord across the country share – we can only hope with political powers airing these views publicly, the wrinkles within the current bill will be ironed out before its proposed introduction next summer.
A cap of six weeks’ rent, in our judgment, offers a balance of greater protection to tenants while giving landlords the flexibility to accept higher-risk tenants. It will also give landlords adequate financial security, and we believe that is necessary to maintain investment and supply in the sector…. Letting agents and landlords who represent good value for money will continue to thrive, while those who rely on charging unfair and unjustifiable fees will have to reconsider their business models.James Brokenshire MP, Housing Secretary, on the plan for a cap on security deposits
We know that the majority of landlords are good landlords, or strive to be, and understand the expectations upon them before they embark on becoming a landlord. However, a number of rogue landlords and letting agents give the sector a bad name, undermine the good work of quality agents and landlords, and they have squeezed tenants for cash in unfair ways, with disproportionate charges for unjustifiable reasonsShadow Minister for the PRS, Melanie Onn MP discussing why she believe the bill is a positive step
(There is) a reasonable concern that if we do not allow a letting agent or landlord to hold back a reasonable amount for referencing, they might be more likely to pick a better-off tenant than some of the lower-income tenants she is seeking, quite rightly, to protect.Kevin Hollinrake Conservative MP for Thirsk and Malton and member of the HCLG Select Committee, expressing his support for the bill, but showing concern in relation to plans for holding deposits and reference fees
There could in some circumstances be an increase in rents to compensate, and that would be legitimate if done properly from the beginning, but again there was evidence that if tenants were asked to pay a bit more each month, rather than a lump sum fee, that would help them in most cases.Clive Betts MP, Chair of the HCLG Select Committee on concerns about rent increases
It cannot be right for an agent to work for both the landlord and the tenant, and for fees to be charged in both directions. The principle has to be that the letting agent acts on behalf of the landlord and that the landlord therefore pays the costs of the agent. Tenants should not be charged for the purposes of identifying a tenancy.Bob Blackman MP, Conservative, Harrow East, Member of the HCLG Committee on tenants being charges fees for tenancy set up
I want to point out that the solution proposed by the Government may merely shift the cost of the burden, not to landlords and lettings agents, but back to tenants in a different way. Banning letting agency fees means that the money will have to come from somewhere else, at least as far as legitimate services from respectable letting agents are concerned. Landlords may well be forced to, or at least will, increase rents across the tenancy to cover the costs anywayAndrew Lewer Conservative MP for Northampton South and Member of the HCLG Select Committee on shifting the costs, and the potential for rent increases
Many landlords are not badly intentioned, but we must do more to stop those who abuse the system. There must be compulsory registration for landlords. There must also be public access to the Government’s database of rogue landlords, and those landlords should not be able to obtain a licence for houses in multiple occupation.Wera Hobhouse Liberal Democrat MP for Bath and HCLG spokesperson, on identifying the root of the issue
A small—I repeat, small—number of rogue agents have spoiled the situation. As the supply-and-demand equation has altered, so, in turn, tenants have become more squeezed.Richard Graham, Conservative MP for Gloucester (and a landlord himself!) on pinpointing the culprits
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