Posted: 3 July, 2013 at 3:39 pm
John Healey has introduced a Bill to control the property market’s ‘Wild West’ by licensing letting agents and banning rip-off fees for renters.
Speaking in the House of Commons yesterday, the Wentworth & Dearne MP and former Labour housing minister described it as “unfinished business.”
The Letting Agents (Competition, Choice and Standards) Bill has cross-party support and backing from housing charities and industry bodies.
Mr Healey said: “There is a silent crisis in the private rented sector. More than 9 million people now rent their home from a private landlord.
“Half of those in private rented homes are over 35 and more than 1 million families with children are basing their lives on landlords who can evict them at a month or two’s notice.
““Generation rent” has no organised voice and little market muscle. We have better consumer rights when buying a fridge or hiring a car than we do when renting a home.
“Anyone can set up as a letting or managing agent, even if they have a bad track record or a criminal record.
“Tenants are often hit by huge and hidden up-front fees. Multiple charges for administration, inventories, references, credit checks, deposit handling, contract preparation and tenancy renewal are common.
“In our local area in Rotherham, the council reckons that tenants are being asked to pay hundreds of pounds for such fees. Research recently released by Shelter reveals that the average cost of up-front fees charged by letting agents is almost £350.
“Landlords often report letting or managing agents failing to provide the services expected or hitting them with hidden and excessive charges.
“Self-regulation has failed. Legal regulation is required to improve choice, competition and standards in the market.”
The Bill would include:
• a legal right to a written tenancy agreement
• a ban on agency charges beyond a deposit and rent in advance
• a redress scheme for when things go wrong
• mandatory national licensing for all agents, with core standards and a “fitness to practise” test
• strong enforcement powers for councils and new powers to set up their own local letting agencies
Mr Healey said the initial cost of regulation would be £46m but that it would bring net benefits of more than £20m a year.
He said: “The private rented market is now failing too many despairing tenants who feel let down by low standards and ripped off by high fees. This sector has been called the property market’s wild west. It is high time Parliament brought the rule of law to bear on the cowboys, and my Bill would do just that.”