The current proposals to ban fees in the private rented sector in England is a missed opportunity to protect tenants as several parts have been watered down, it is suggested.
According to the Mayor of London, Sadiq Khan, in particular calls for deposits to be capped at no more than three weeks’ rent, Ministers have backtracked and now propose six weeks.
He believes that this will leave tenants vulnerable, especially in London where renters need to find nearly £3,700 each time they move home, compared with the nationwide average of £2,000.
In a joint letter to the Prime Minister, housing charity Crisis, Generation Rent and Citizens UK, he says that a six week scenario is not supported by any organisation representing tenants.
In addition, he says that the Bill contains loopholes that mean letting agents could still end up charging tenants excessive fees, spread throughout a tenancy rather than charged up-front. Khan claims it formalises agents’ ability to charge renters for basic services, such as responding to emergency call-outs that should be covered by the management fee landlords have already paid.
The Mayor and organisations representing renters say these measures mean the Bill ‘opens the door to an entirely new culture of exploitation’.
Hannah Gretton, community organiser at Citizens UK, is backing the Mayor’s stance. ‘The Tenants Fees Bill has the opportunity to prevent millions of renters in London from being exploited by hidden fees and bad landlords, but unfortunately the current plans do not go far enough,’ she said.
‘Tenants paying such extortionate hidden fees is completely unacceptable. We’re urging the Government to scrap potentially exploitative default fees and give councils the stronger enforcement powers to deter criminal landlords,’ she added.
As the Bill is passes through its parliamentary stages, the Mayor is calling on Ministers to make amendments to give renters protection from exploitation by capping rental deposits at three weeks’ rent, and holding deposits at one day’s rent, to reduce up-front costs for renters.
He is also calling for the scrapping of provisions for new and potentially exploitative ‘default fees’ to be written into tenancy agreements, and for ‘charges to enact a change of sharer’ which will fall disproportionately on renters living in shared housing.
Khan also wants some deterrent for bad behaviour such as increasing the penalties councils can charge for illegal fees to £30,000, and enabling tenants to directly claim back prohibited payments along with compensation worth up to three times the fee paid.
‘Rising rents, ongoing insecurity, and in too many cases poor quality housing make the 2.4 million private renters in London amongst those worst affected by the housing crisis. By backtracking on proposals and watering down the strength of this Bill, Ministers are in danger of opening the door to an entirely new culture of exploitation, with the legislation left unfit for purpose and simply a missed opportunity to truly help renters,’ said Khan.
‘This is just one area of housing where Ministers are letting people down, both in London and across the country. Social housing residents need a much stronger voice, and yet the promised Green Paper about this is nowhere to be seen,’ he added.
‘Rough sleeping is at a crisis level, yet the Government’s strategy remains unpublished. Ministers need to show they mean what they’ve said by urgently taking action, with increased funding, rather than breaking their promises and hoping no-one notices,’ he added.
Earlier this year the Mayor launched his Rogue Landlords and Letting Agents Checker, which allows Londoners to check if the landlord or letting agent of a rental property has been convicted of any housing offences. All 33 London local authorities have signed up to the tool, the first of its kind in the country.
‘There’s a shortage of social housing, and deposits and other fees for private rented housing are hundreds of pounds, amounts that many homeless people simply can’t afford. This is a desperate situation, and it’s all the worse because our research shows that homelessness can be ended with the right policies in place,’ said Hon Sparkes, chief executive of Crisis.
‘The Tenant Fees Bill is a chance to address some of these issues but we’re concerned that the Bill as it stands actually risks making the situation for renters worse. For example, it only proposes capping deposits at six weeks’ rent, which could make deposits at this high level the norm. Among other amendments, we’re calling for this cap to be set at three weeks, to reduce the upfront costs that shut out homeless people and others on low incomes,’ he explained.
‘Around 142,000 households across England are currently experiencing the worst forms of homelessness and our research shows that this will double by 2041 if nothing is done. The Government must put in place the measures that will end homelessness for good,’ he added.
