August 2016 – Letting Agency Fees

August 2016 – Letting Agency Fees

Thank you for contacting me about letting agent fees.

The Government is committed to promoting a strong and thriving professional rented sector where tenants enjoy decent standards and receive a service that represents value for money.

I do not believe that a blanket ban or cap on letting agent fees is the answer to tackling the rogue letting agents who exploit their customers by imposing inflated fees for their services. The Government is committed to promoting a strong and thriving professional rented sector where tenants enjoy decent standards and receive a service that represents value for money. The evidence from Scotland, where letting agent fees have been banned, suggests the ban has led to higher rents.

It is for this reason, therefore, that I will not be supporting EDM 326 (though by practice, I do not traditionally sign EDMs). A ban on letting fees could lead to increased rents, and will not solve the problem of rogue or exploitative letting agents.

The vast majority of letting agents provide a good service to tenants and landlords, and most fees charged reflect genuine business costs. However, the Government has taken action to ensure full transparency of fees. Since 2015, letting agents and property managers have been required to display a full tariff of their fees prominently in their offices and on their websites, with a fine of up to £5,000 if they fail to comply. Such transparency will help to deter double charging by letting agents and enable both tenants and landlords to shop around, encouraging agents to offer competitive fees.

The Government is currently reviewing whether to make client money protection mandatory for lettings agents and is committed to a wider review later this year to investigate the effectiveness of transparency measures and will consider whether more action needs to be taken.

Thank you again for taking the time to contact me.