Tenant Fees Bill ‘could lead to rent rises’, says RLA

The government’s Tenant Fees Bill now introduced to the Commons is a ‘missed opportunity’ to make quicker and more lasting improvements in the rental market, according to the Residential Landlords Association (RLA).

The Bill, which comes as part of reform of the private rental sector, means that tenants are now one step closer to seeing letting fees banned. But the RLA argues that changes should have been made to better enforce existing regulations designed to improve transparency around letting agent fees.

Since May 2015 the law has compelled letting agents to publish details of the fees they charge. Agents breaking this law can be fined up to £5,000.

However, according to data published last year by the National Approved Letting Scheme, 93% of councils had failed to issue a single financial penalty to a letting agent for breaching the law.

There are now concerns among some experts that the fees ban will simply shift the cost of all letting agent fees on to landlords, and if that were to happen, it would leave most landlords with no choice but to further increase rents, as letting agents look to pass existing tenant fees onto landlords.

“With warnings that the policy could lead to rent rises, there is a very real danger that whilst the cutting the upfront cost of renting, tenants will find themselves paying them through higher rents on a permanent basis,” said the RLA’s policy director, David Smith.

Instead of banning letting agent fees paid to tenants, the RLA is calling for immediate action to better enforce the law as it currently stands. This includes the government using powers it has so far failed to use to force agents to display the fees they charge in more prominent positions and specify them in much greater detail.

“Laws without proper enforcement serve only to let tenants and good landlords down,” Smith added.

He continued: “Rather than pressing ahead with plans for more legislation in the sector that will take time to be considered by parliament and enacted, ministers could achieve a greater and earlier impact by using the powers they already have to improve the transparency of fees charged by agents.”

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