There's a new Bill moving through Parliament which, if made law, proposes to ban letting agents charging fees to tenants.
Back in May, Baroness Grender of the Liberal Democrats introduced the Private Members' Bill, named the Renters' Rights Bill.
Since then, the Bill has successfully navigated its way through two unopposed readings in the House of Lords and will next go to Committee Stage.
Should some or all of the proposed measures be introduced, they’ll have a significant effect on the way letting agents run their businesses.
With this in mind, we've taken a closer look at what’s been put forward and the next stages for these proposed laws...
What is it?
The Bill's key focus is to amend the Landlord and Tenant Act 1985 to ban letting agents from charging tenants for:
- registration fees
- administration fees
- inventory check fees
- reference check fees
- tenancy extension or renewal fees
- exit fees
It also proposes that the recently introduced Housing and Planning Act is amended to allow tenants access to the database of rogue landlords and letting agents (which is yet to be launched).
In its current form, the Housing and Planning Act suggests that the database of criminal operators will only be open to local authorities and the Government.
The Renters' Rights Bill also proposes a further change to the Housing and Planning Act, suggesting that any landlord entered on to the rogue database should not be able to apply for an HMO licence.
The Bill's other proposal is make electrical safety checks in rental properties mandatory, requiring landlords to carry them out every five years.
After the successful second reading, Baroness Grender commented: “Letting agents should not be able to get away with double charging fees – imposing them on both tenants and landlords – when in fact it's only the landlord that is the client and therefore the one that should be paying.
“Tenants are charged fees because agents know they can get away with it.
“These fees are already banned in many countries, including Scotland and the US, because the pro-consumer case for doing so is clear.”
How likely is it that this will become law?
The Bill still has to pass through many reviews and readings before becoming law – so even if it passes through all these stages unscathed, it may not become law for some time.
However, at the moment there’s nothing to suggest that it won't continue to pass through Parliament unopposed. So far it’s received strong support from Baroness Grender's own party, the Liberal Democrats, as well as endorsement from the Labour Party.
Letting agent fees charged to tenants are an emotive subject, particularly in London. And that's one reason why this Bill’s likely to be successful in some form.
What's more, since March, a campaign against letting agents charging fees to tenants has been gathering serious momentum.
A London tenant, Vicky Spratt, launched the campaign called 'Make Renting Fair in England'. It’s received widespread national press coverage and the petition now has over 250,000 signatures.
The success of Spratt's campaign is likely to give the Renters' Rights Bill more firepower as it's clear there’s a large proportion of society who are unhappy with the way administration fees are currently charged.
The Bill passed its first reading in the House of Lords on May 23, and its second reading in the House of Lords on June 10.
The next part of its passage is the Committee Stage in the House of Lords, a date for which is yet to be announced.
It'll then have to pass through three readings, a committee stage and review stage in the House of Commons before receiving Royal Assent, which is when it formally becomes law.