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Regulation & Law

First MP to reply to ARLA’s tenant fees ban letter say industry is “perverse”

Reading MP ignores agent's points about bill's likely threat to rental market and jobs, and reveals how closely Labour and Conservatives are aligned on Tenant Fees Bill.

Nigel Lewis

The mountain that the industry must climb to defeat the tenant fees ban has been revealed after a Labour MP replied to a letter sent to him by a local letting agent following ARLA’s recent call for action.

ARLA last week asked agents to write to their local MPs, and Reading branch manager Khalil Iqbal obliged – only to receive a blunt rebuttal from Matt Rodda, his MP for Reading East and Shadow Minister for Local Transport.

From his letter it’s clear that not only does ARLA have to persuade the Conservative government that the bill will damage local rental markets and employment, but also must change Labour thinking too.

Khalil, who is a branch manager at Reading agency Adams Estates, received his letter on Saturday from Rodda, who in his reply dodged all the points made by Khalil about the damage the bill may wreak.

Perverse

Instead the MP says the industry is “perverse” because tenants are charged by agents for a service provided to landlords and that agents fees increased by 60% between 2010 and 2015, he claims.

The MP also highlights in the letter how closely Conservative and Labour policy is aligned on housing.

For example, Rodda says a Labour government would give renters new consumer rights to live in ‘fit for human consumption’ properties, a policy the current government is already pressing home.

Rodda also confirms in the letter that a Labour would introduce rent controls.

Here is the full text:

Dear Khalil,

Thank you for writing to me on the issue of banning letting agent fees. As you may be aware, the Labour Party committed at the last election to legislate to ban letting agency fees for tenants.

This is because the current situation, which perversely charges tenants for a service when the landlord is the customer, is untenable.  Evidence shows that letting agent fees have rose 60 per cent between 2010 and 2015 – and it is tenants who are suffering as a direct result.

The principle behind shifting the burden to landlords is simple. Landlords have the power, unlike renters who are forced to deal with whichever agency is marketing the home they want, to ‘shop around’ and can therefore better avoid and force down uncompetitive charges.

Even if the costs are returned to the tenant through higher rent the total amount paid would be reduced (through the landlords shopping power) and, importantly, spread over the length of the tenancy, which reduces the financial shocks of renting. More widely, you may be interested to know that a Labour government would also empower tenants to call time on bad landlords by giving renters new consumer rights.

For example, Labour would introduce new legal minimum standards to ensure properties are “fit for human habitation’ and empower tenants to take action if their rented homes are sub-standard. We will also introduce controls on rent rises to ensure they are reasonable.

This is because we are concerned that renters are paying large sums of money on homes that the government classes as “non-decent’ and that around a quarter of the rent for such homes is paid for by housing benefit, which is clearly not value for money for the taxpayer.

Unfortunately, letting fees are a factor here too – as the significant cost of fees and deposits can discourage tenants from moving out of unsuitable homes.

I trust that the information provided above is useful, and thank you again for your correspondence.

Yours sincerely

Matt Rodda

Member of Parliament for Reading East
Shadow Minister for Local Transport

May 21, 2018

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