Protecting tenant from a hidden tax

Jenny Rathbone calls on the Welsh Assembly to abolish letting agency fees in Wales.

Abolishing letting agency fees may cause little more than a ripple in the out of control over-inflated London housing market.

But abolishing letting agency fees in Wales could make a huge difference for private renters. Tenants have to pay up front between 25% and 35% of the first month’s rent somewhere between £150 and £250 for the first tenant and a further £40 to £150 for each subsequent tenant. One Cardiff agency charges an eye watering £390 for the first tenant; £480 for two. This of course is on top of the bond or deposit of one or two months’ rent to cover damage or breakages.  Some agencies also charge tenants to process references or guarantor forms on top of their fee.

Letting agents are there to serve the interests of landlords to find tenants to fill their properties. So it is landlords who should pay their fees. Letting agents do occasionally pay attention to the state of repair or disrepair of the properties they are handling and the financial status of their owners. But the stories I get to hear about are the tenants made homeless when the bailiff repossesses the property because a buy to let landlord has failed to keep up their mortgage payments. Or the property that is still a building site when tenants are due to move in. The letting agency professes surprise and ignorance. The letting agent who hands over the keys to a property in a filthy state, but insist on an additional charge for a deep clean at the end of the tenancy, is almost certainly acting fraudulently.   

The shortage of Council or housing association homes has pushed some very vulnerable families into the private rented sector. The greatest injustice of letting agency fees is tenants in receipt of Housing Benefit. Housing Benefit does not cover letting agency fees, so it has to come out of the meagre money they get for food and other basic needs.

The Welsh Government resisted attempts to include abolishing letting agency fees in the 2014 Housing Act on the grounds that this consumer protection might not fall within the competency of the National Assembly and a legal challenge could have delayed its passage onto the statute book. Subsequently I have had clear legal advice that the Assembly does indeed possess such powers.

Now that even the UK Conservative Government has come round to the idea of protecting tenants from this hidden tax on those least able to pay, I hope the Assembly will act quickly to rectify this injustice for Welsh tenants.

Jenny Rathbone is the AM for Cardiff Central.

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