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Commons to Debate Banning Letting Agent Fees

May 13, 2014 | Landlord News  

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MPs will be voting today on whether letting agent fees charged to tenants should be banned. The proposals have been put forward by the Labour Party in the form of an amendment to the Consumer Rights Bill, a measure that is just a part of Labour’s plans to shake up the private rented sector.

Labour argues that the fees are a major difficulty facing “generation rent”. Shadow housing minister Emma Reynolds said, “Across the country, private renters are being hit hard by David Cameron’s cost-of-living crisis and paying unfair fees to letting agents.”

One would be hard-pressed, however, to find support for the measure within the lettings industry. It has been argued that axing letting agent fees would not benefit the tenant in the long-run, as the costs have to covered somewhere, which inevitably means an increase in rents. This is what has been seen in Scotland, where letting agent fees were outlawed in 2012. The rate of rent increase in Scotland is now second only to London.

Fees exist for a reason, and as long as they are transparent, up-front and proportional, with no hidden extras, they protect the interests of the tenant. All reputable agents agree with regulating the industry and thwarting rogue agents, but banning fees altogether would likely do more harm than good.

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