There’s something to celebrate for private renters: the government’s hotly anticipated ban on letting fees is approaching its second reading. Because for too long, renters have been ripped off – shelling out £272 per person (on average) in fees. Together with our supporters, we’ve campaigned for years to stop this, so we’re delighted to see the government taking action through the Tenant Fees Bill.
Letting agents, and some landlords, aren’t quite so jubilant. Their days of charging outrageous fees are numbered. But they have a glimmer of hope…
Although all upfront fees will be banned, there’s a loophole in the bill which will leave a back door open for letting agents to continue charging ‘default’ fees. These are written into contracts; charged if an agent or landlord incurs a cost due to actions of the tenant – like replacing lost keys or paying rent late. The problem is that without more protections, agents and landlords will charge what they like, for almost anything they like – giving them free reign to rip people off.
They intend to exploit this
There’s no doubt about it: letting agents and landlords intend to exploit this loophole. Just take a look at this list of the most scandalous fees our supporters have been charged. Can you guess whether each type of fee would be banned?
1. £210 for ‘tenancy agreement preparation’
Does this letting agent still draw up contracts by candlelight, with a feathered quill?
2. Landlord’s time, at £20 per hour
£20 an hour. That’s two and half times the minimum wage, £160 a day, £800 a week, £3,200 a month, or £38,400 a year. It’s the equivalent of what a biochemist earns!
3. £500 for reference & credit checks
The actual cost of running a reference check is between £10–£15… Leaving just a casual £490 profit for this enterprising agent. ‘The Apprentice’ beckons.
4. £45 procurement fee for dustpan and brush
The procurement cost was 15 times the actual cost of the dustpan and brush. The landlord really cleaned up here.
5. £225 contract renewal, per tenant
Yet another agent that doesn’t seem to have grasped basic word processing skills. File alongside ‘tenancy agreement preparation’.
6. £200 to remove a new set of saucepans
Charity begins at home – but not for this agent, who removed a brand new set of saucepans a kind renter left for the next tenants, and charged a staggering £200 to do it. What will they cook up next?
7. £360 inventory fee
If only we could all charge as much as this agent for writing a simple list…
8. £100 for cobweb removal
A hefty mark-up on a few sweeps of a feather duster. An arachnophobic letting agent, perhaps?
9. £200 checkout fee
In other words, paying for the privilege of leaving your home once the contract’s up.
10. £10 to iron curtains… per curtain
The most bizarre, audacious fee on the list. It had us in creases!
Is this real life?
These fees all beggar belief, but sadly, they’re all real-life examples. It’s great that unfair upfront fees (like tenancy agreement preparation, reference checks and inventory fees) will be banned. Many renters are already struggling with rising rents and shrinking wages, and these upfront costs make renting even more unaffordable.
The charges outlined above that won’t be banned are examples of fees that could be permitted as ‘default fees’ under the new Bill.
The government knows these are open to abuse; making changes to the bill as a result. But we still think there’s a loophole – and without more protections, letting agents and landlords will try to exploit default fees. It will be difficult for tenants to challenge them.
The government must prevent this, by limiting the type of default fees allowed and making it easier for tenants to challenge any unfair fees.
Your MP has a key role to play. They can stand up for renters, and demand that backdoor charges are stopped. They have a big chance to do this at the bill’s second reading on Monday 21 May. But MPs will only act if they feel pressure from their constituents. We all need to contact our MPs now, asking them to speak up for renters in parliament.
Together, we can make sure the government protects renters from exploitative fees and closes the backdoor left open for letting agents.
Please, contact your MP today.
This blog was updated on 17/05/18.