The much-debated tenant fees bill passed through its third reading at the House of Commons yesterday afternoon, increasing the likelihood that charging tenants fees will soon be banned alongside other regulatory changes.
All that remains is for the bill to be debated in the House of Lords, after which it will become an Act (law). All existing and legacy contracts will become subject to the Act’s provisions within 12 months of this date.
During the proceedings, amendment 4 was one point of contention between MPs, which led to some robust argument. Tabled by Daniel Kawczynski MP, the amendment “would allow letting agents to charge fees for various services connected with the establishment or renewal of a tenancy but would cap such fees at £300.”
Robert Goodwill MP argued against this amendment, saying: “A problem people often face when moving house is that the deposit put on the previous house is not made available at the same time as the new tenancy takes effect. Therefore, having to find, for example, six weeks’ rent at £100 a week plus another six weeks’ rent at £100 a week, plus maybe a £300 fee, as the amendment suggests, means a person looking to rent a two-bedroom flat in Scarborough or Whitby would need to find £1,500 of cash just to make that house move.”
Kawczynski replied: “a ban on tenant fees will lead to rents increasing by around £103 per annum,” before suggesting that lost revenue being captured through higher rents is less transparent and accountable than a “clear, specific fee.”
Christopher Chope MP added that, “this is not a Conservative measure at all, and I despair at the fact that so many people seem to want to support this exercise in socialism and control.”
However, the amendment was not pressed to a vote. On this, ARLA Propertymark chief executive David Cox says: “We’re disappointed but unsurprised the Tenant Fees Bill has passed the House of Commons. Over the summer, we worked with Daniel Kawczynski MP on his amendment to allow agents to charge up to £300. Although the amendment was unsuccessful, this shows that members involved in ARLA Propertymark’s campaign have helped MPs understand the unintended consequences of the tenant fee ban; with some MPs listening to the legitimate concerns of the industry.”
Another feature of the new bill is the abolishment of “excessive fees for minor damages.” The government gives the example of a tenant being charged “hundreds of pounds” to replace a smoke alarm that costs £60 as behaviour it wishes to put a stop to. In all cases, the landlord will have to provide evidence of costs before charges can be made.
Furthermore, the bill states that any unlawful fees paid by the tenant will have to be returned within seven to 14 days instead of the current time frame of 14 to 28 days.
“The bill is not about driving letting agents out of business, but about levelling the playing field so that the small minority of bad actors in the industry are not able to continue to the disadvantage of the vast majority of agents who do a terrific and valuable job, which we want to see continue,” said Rishi Suank MP.