Response: Draft Tenant Fees Bill

By: Rhea Newman  Published: January 2018


Shelter's written evidence to the Communities and Local Government Select Committee on the draft Tenant Fees Bill. The bill sets out the Government's approach to banning letting agent fees in England.

Summary

Shelter welcomes the draft Tenant Fees Bill and the Government’s ongoing commitment to making private renting fairer and more affordable. Shelter is very pleased the Government has held firm on its promise to introduce an outright ban on upfront letting fees as this will ease the financial pressure on private renters, whilst also making the lettings market more competitive and transparent. We are keen to see the ban implemented as soon as possible to prevent tenants being exploited by opportunistic agents who continue to increase fees in anticipation of the ban.  

Overall the Bill is a significant step towards a fairer and more affordable lettings market, but needs tightening to ensure it will not be undermined by agents/ landlords charging default fees. Introducing this concept creates a fundamental weakness into otherwise strong legislation as it is inconsistent with consumer contract law and creates a loophole which can be exploited so Shelter urges the Committee to reject the inclusion of default fees as a permitted payment.  

The introduction of a cap on deposits is a further welcome sign of the Government’s commitment to making renting more affordable. However, Shelter feels the Government has missed an opportunity to meaningfully tackle the barriers created by upfront costs by rowing back on its promise to cap deposits at one-month’s rent. Shelter would encourage the Committee to review the levels of the cap on security and holding deposits as well as the conditions under which holding deposits should be returned, to ensure tenants are properly protected.  

Subject to the suggestions above, Shelter anticipates the Bill will have positive benefits for tenants, landlords and the lettings industry. Realisation of these benefits will rely on there being meaningful enforcement by Trading Standards and Shelter is pleased to see the Committee is considering the resource implications for local authorities.

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