Tomorrow, MPs will debate and vote on whether to ban letting fees, as part of the Consumer Rights Bill. Shelter has long called for an end to letting fees, with over 16,000 people joining our campaign since June last year.
For England’s 9 million renters, letting agent fees are just one example of the powerlessness of renting. Something that feels unjust but is so ingrained in how renting works. But we wanted to demonstrate it didn’t need to be this way. So last June we set about an experiment. We wanted to show that you just wouldn’t have to accept arbitrary charges in any other scenario – such as when buying a coffee. The point: you wouldn’t accept random fees when buying a coffee – so why should renters have to put up with it when trying to secure a home?
You can see what happened for yourself:
In short people weren’t happy. No one likes being hit with unexpected fees and certainly not when they can see no good reason for it. No surprise then that 1 in 4 renters have said they’ve been charged an unfair fee. And when 1 in 7 renters are hit with fees of over £500 or more you can see why renters feel ripped off.
But fairness is not the only issue. Fees can have a crippling impact on people’s finances. More than half of people who used a letting agency reported experiencing financial difficulties because of fees, 27 per cent said they had to take out a loan or borrow money to cover unexpected fees and 17 per cent cut down on food or fuel to pay the upfront costs. Whilst renters can plan for rent, deposit and moving costs, fees are often not declared upfront and are unpredictable.
And these fees are anti-consumer and distort the market. Renters aren’t the customer of the letting agency – the landlord is. Renters don’t choose the letting agency – the landlord does. And if the agency double-charges landlords and renters for the same service, there aren’t any rules to stop them. Scotland and parts of Australia have shown it’s possible to end letting fees to renters, there the costs are paid by the customer, the landlord.
We’re not alone in thinking something needs to change. Polling carried out this week shows 67 per cent of the British public support a ban on letting fees, with only 10 per cent opposing. The policy also has cross party support with 71 per cent of Conservative voters and 70 per cent of Labour voters polled supporting the move.
The amendment on Tuesday has been put down by the opposition but follows a gradual political acceptance across all parties that the unregulated lettings market must be tackled. Last month Liberal Democrat MP Julian Huppert laid down a 10 minute rule bill calling for an end to excessive fees. And the government, whilst reluctant to go beyond calls for transparency on fees, have begun to tackle the lack of professionalism in the lettings market by introducing a compulsory redress scheme. It will be up and running from later this year, and for the first time will give renters someone independent to complain to when something goes wrong.
The political tide is turning. Politicians are beginning to recognise the importance of fixing private renting. Ending letting fees is one of those rare policies: It’s simple, it’s popular, it’s worked elsewhere, and it will put hard cash back in the pockets of ordinary renters. It’s time to ban fees for good.