Fees transparency to ensure a fair deal for landlords and tenants
13 May 2014 02:41 PM
Letting agents will be required to publish full details
of the fees they charge under plans announced by government ministers today (13
May 2014). The move ensures a fair deal for landlords and tenants, closing off
the opportunity for a small minority of rogue agents to impose unreasonable,
hidden charges. The common sense approach avoids excessive state regulation
which would push up rents for tenants.
Currently, the Advertising
Standards Authority only requires letting agents to list compulsory
charges to the tenant upfront in the process. Those letting agents who are
found to have imposed hidden charges face little more than being “named
and shamed” on the Advertising Standards Authority’s
website.
But
the government wants to go further than this, and will require all letting
agents to publish a full tariff of their fees - both on their websites and
prominently in their offices. Anyone who does not comply with these new rules
will face a fine – a much stricter penalty than currently
exists.
Today’s plans add to the work the government is
already doing to offer stronger protections for landlords and tenants in the
private rented sector, whilst avoiding excessive regulation which would force
up rents and reduce choice.
Housing Minister, Kris Hopkins, said:
The
vast majority of letting agents provide a good service to tenants and
landlords. But we are determined to tackle the minority of rogue agents who
offer a poor service. Ensuring full transparency and banning hidden fees is the
best approach, giving consumers the information they want and supporting good
letting agents.
Short-term gimmicks like trying to ban any fee to
tenants means higher rents by the back door. Excessive state regulation and
waging war on the private rented sector would also destroy investment in new
housing, push up prices and make it far harder for people to find a flat or
house to rent.
Further information
The
government’s amendment to the Consumer Rights
Bill will be made at a future stage of the bill. The government will
review the requirement for greater transparency after 12 months of operation to
confirm it is delivering the expected benefits, and review whether any further
steps are needed.
Trade bodies have said any blanket ban on all fees would
just increase rents.
The
government has already introduced new legislation which will require all
letting and managing agents in England to belong to an approved redress scheme.
Last month, Housing Minister Kris Hopkins approved 3 redress schemes that all
letting and property management agents will be required to join later this year
- ensuring tenants and leaseholders have a straightforward option to hold their
agents to account.
The
3 compulsory schemes - the Property Ombudsman, Ombudsman Services Property and
the Property Redress Scheme - will offer independent investigation of
complaints about hidden fees or poor service. Where a complaint is upheld,
tenants and leaseholders could face compensation.
Other measures in the pipeline include:
- a
new code to set standards for the management of property in the private rented
sector - with a view to making it statutory
- a
new “how to rent” guide, which will help tenants understand what
they should expect from their rental deal
- the
introduction of a voluntary, model tenancy agreement, which landlords and
tenants can use for longer tenancies, which will provide extra security and
stability for families
- extra guidance for local councils on tackling rogue
landlords, protecting tenants from illegal evictions and how best to push for
harsher penalties before magistrates for housing offences.
The
government is also increasing investment in house building, as well as
increasing institutional investment in new private rented sector accommodation.
The new £1 billion Build to Rent fund will provide development phase
finance to large-scale private rented sector developments, building up to
10,000 new homes for private rent and demonstrating the viability of developing
and investing in large-scale private rented sector projects. The
government’s housing guarantee scheme is also supporting up to £10
billion worth of investment finance in large-scale private rented projects and
additional affordable housing.