Liz Silversmith asks why more progress hasn’t been made on letting fees in Wales
There’s been some curious developments in the Assembly recently on whether Wales should ban letting agency fees. After Chancellor, Philip Hammond, announced that he will ban them in England, there’s a real possibility we’ll up in a position where out of Scotland, England and Wales, only Welsh renters pay letting fees.
Throughout the passage of the Renting Homes Bill, Let Down in Wales consistently campaigned for letting fees to be banned. This was alongside other measures we felt would ensure renters’ rights: such as an Ombudsman or Tribunal to mediate between renters and landlords, and a new Welsh Tenants Quality Standard, in order to bring private housing quality up and in line with social housing’s Welsh Housing Quality Standard.
However, the Welsh Government repeatedly voted down attempts to do so. Plaid Cymru’s former housing spokesperson, Jocelyn Davies, tried amendments to ban fees but the then Housing Minister – Lesley Griffiths – stated she was worried this would merely increase rents. This is in spite of the fact that Shelter did not find any evidence for this when they were banned in Scotland and a House of Commons select committee decided that any evidence was inconclusive.
Just because letting agents tell you they will push the rents up, doesn’t mean they will. Actually, rents are usually determined by the average wages in the area. If a flat is unaffordable, it’s unaffordable; rents go up because of supply and demand, not because the agency is annoyed that they can’t charge fees anymore.
In addition to this excuse, the Welsh Government insisted that they did not have the powers to ban letting agency fees, despite housing being devolved. This was proven wrong by one of their own backbenchers, Jenny Rathbone AM, when she secured a short debate in September 2016 on banning letting agent fees. Her advice from the Assembly’s Head of Legal Services confirmed that the Welsh Government actually does have the powers.
This was proven, yet again, after Philip Hammond’s announcement in last year’s Autumn Statement, as he said this will only apply to England; clearly he is certain this power is devolved as well. It will be interesting to see how that develops; this is expected to go out to consultation in the next month or so.
So where are we now? On 25th January, five AMs attempted to put forward Proposed Member Bills (when backbenchers have the opportunity to put forward their own legislation, rather than just follow the Welsh Government’s legislative agenda). There were three Labour backbenchers and two UKIP AMs who tabled ones to ban fees. A debate back in December, led by UKIP, confirmed that there was support across the whole Assembly for this legislation; Plaid Cymru, Welsh Conservatives and Labour backbenchers all joined them in calling for the fees to be banned.
Given this strong support, a Proposed Member Bill would almost be guaranteed to go through. But, unfortunately, none of these five AMs were picked. The ballot is merely a lottery and out of 29 proposed Bills, the odds weren’t great.
After this, it feels a little back to square one, with the Welsh Government still delaying any work to actually ban them and with backbenchers still frustrated at the lack of action. However, we do have confirmation that the whole Assembly is in support of this and that Welsh Ministers absolutely do have the powers to do something.
It would be an embarrassment for Welsh Labour if the UK Government got there before them, particularly since this was actually a UK Labour pledge in their 2015 manifesto. Given Philip Hammond’s pledge, they probably will be banned in England first, and we could then be in a situation where both Scotland’s and England’s renters don’t have to pay fees, whereas in Wales, we’re stuck with them, until the Welsh Government decides it’s a high enough priority.
Let Down will continue with our campaigning. Since there won’t be another Proposed Member Bill ballot until much later in the year, we’ll be pressing the Cabinet Secretary, Carl Sargeant, for action. Shelter Cymru has a petition going through the Petitions Committee which we wholeheartedly support, but a letter from Mr Sargeant still seems to indicate an overly cautious approach to action.
Every day this work is delayed is another day renters have to pay more money for an unfair and frequently sub-standard service, which they have no other choice but to use.
This first iteration of this article appeared on 30th January on WHQ.org.uk
I am uninformed about this issue and don’t have a view but I am puzzled by something Ms Silversmith writes. She says: “Actually, rents are usually determined by the average wages in the area. If a flat is unaffordable, it’s unaffordable; rents go up because of supply and demand, not because the agency is annoyed that they can’t charge fees anymore.”
Why doesn’t that argument work in reverse? If the letting agent charges fees, the cost of the flat can’t go up (market forces) so the landlord gets a lower rent. Why do we think the tenant not the landlord ultimately bears the cost of the fees? And if the landlord bears the cost, why use a letting agent at all rather than advertise in the local paper or on the web? How can letting agents make a living if they are not doing anything useful? What exactly is the nature of the market failure?
Perhaps the Welsh government would act if these things were a bit clearer.