Labour MPs defeated in vote to ban letting agents charging tenants fees

Labour MPs defeated in vote to ban letting agents charging tenants fees

10:13 AM, 16th May 2014, About 10 years ago 5

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Labour MP Stella Creasy, tabled a motion to amendment the Consumer Rights Bill banning letting agents from charging fees to tenants. The vote was defeated by 228 for to 281 against with all but 3 coalition MPs voting against.

Ms Creasy during the debate said “it is a fundamentally anti-competitive corporate practice. We want to do something about it”. “You have to make a decision in this House on whether you are on the side of the consumer or on the side of business.”

This was an effort to stop the practice of Letting agents charging both landlords and tenants which Ms Creasy says shows letting agents do not have the best interest of either party at heart, and is placing unnecessary financial burden on consumers who need to frequently move properties.

The Coalition earlier countered with their own amendment fining letting agents if they fail to publish full details of fees charged to tenants arguing that this transparency of forcing agents to publish fees means they would have to justify the charges properly increasing competitiveness.

David Cameron has said he would consider working with Ed Miliband on proposals for longer term tenancy agreements, but would not support old fashioned rent controls.

A pre-vote Labour press release said – “Across the country, private renters are being hit by the cost-of-living crisis and paying unfair fees to letting agents. The next Labour government will pass legislation to ban letting agent fees for tenants and to introduce longer-term tenancies with predictable rents.”

“David Cameron and George Osborne are totally out of touch with the cost of living crisis facing the nine million people who rent privately, including 1.3 million families with children. The Tories promised to improve private renting but they’ve turned their back on reform.”

ARLA MD Ian Potter said, “Labour’s amendment was ill thought through and its failure to pass illustrates this. I’m glad that the majority of MPs recognise that a ban on letting agent fees will only lead to an increase in rents, as landlords and agents seek to achieve returns. Fees are not arbitrary or unnecessary they represent a business cost that those tabling the amendment failed to recognise. ARLA’s call, as ever, is for wholesale regulation of the market to ensure fair and transparent practices for all consumers, landlords and agents alike.”Letting agents

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Mark Alexander - Founder of Property118

10:21 AM, 16th May 2014, About 10 years ago

Mrs Creasey clearly doesn't understand the economics of the letting industry. I would argue that the vote has protected both tenants and landlords.

Any "tinkering" with an established industry is dangerous. Whilst we are in a housing crisis it would be foolish to upset the equilibriam.

Clearly the MP's who voted for the proposals do not understand the importance of the evolution of online letting agents and how they are reducing the costs of letting to all parties. If the motion been approved the online letting model could have been destroyed in an instant.

It also worries me that David Cameron is considering cavorting with the enemy over Ed Militants ill-conceived, albeit popular ideas amongst the ignorant, over tying landlords into long term tenancies.

Please re-tweet the following to get more people involved in this discussion

Adam Hosker

12:56 PM, 16th May 2014, About 10 years ago

There is one good thing to come out of it; the Con/Lib coalition announced they will make it law to require agents to disclose all there fees on their website.

A letting agency charging £60 referencing, is going to look good compared to the £900 agent. It will hopefully make it better "value for money" generally.

Stupid labour plan, to cut income of agents! Except it wont work the fee will shift to Landlords and Landlords charge the Tenant anyway.. Just "moving" the fee around, is all.

Romain Garcin

13:47 PM, 16th May 2014, About 10 years ago

If chuckled when I read Ms Creasy's idea that charging money was an anti-competitive practice...

Note that last year the ASA ruled that compulsory fees must be clearly indicated on advertisements (whether ad by landlord or agent):

Ed Atkinson

10:01 AM, 17th May 2014, About 10 years ago

This is equivalent to online shopping where there is a price and a delivery charge. There is no point outlawing the delivery charge, but it must be very clear upfront. The problem with agent's fees is that they are still not clear upfront, despite the new ASA rules.

When we advertised using an online agent and we decided to charge no fees at all, our posting on Rightmove had "fees apply" in exactly the same way as the other agents. When you clicked on the link, it just said a general message that fees may apply and look it up on the agent's website. USELESS!

Michael Barnes

15:16 PM, 17th May 2014, About 10 years ago

Reply to the comment left by "Ed Atkinson" at "17/05/2014 - 10:01":

I completely agree that it is not possible in most cases easily to determine what fees (if any) apply for an advertised let.

On-line there it a complex trail to follow.
In newspapers there is often nothing at all.

The ASA ruling seems to have had no effect on making charges easily comparable.

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