Government closer to banning scams for rental brokers

The bill went through the Commons yesterday and will now pass the House of Lords

Tenants across the country waited almost two years until the promised ban on renting astronomical landlords would occur.

But this week the government came a step closer when the account of tenant fees went through the third reading in the House of Commons. It will now pass the House of Lords to be examined before it becomes law.

The new rules, which were presented for the first time by Chancellor Philip Hammond two years ago, would imply a ban on landlords and rent agents in England to charge tenants additional costs when they sign up for a new rental object.

The bill went through the Commons yesterday and will now pass the House of Lords

The bill went through the Commons yesterday and will now pass the House of Lords

It was introduced because of a minority of agents who routinely overcharged tenants for simple tasks – many of which also billed landlords, either as part of standard brokerage fees or as extras.

The bill also proposes a ceiling for the deposits that tenants pay at the beginning of their rent – up to the equivalent of six weeks' rent.

Government analysis shows that tenants save on average about £ 300 each time they move as a result of the ban.

Minister Rishi Sunak of the minister said: "Tenants throughout the country, regardless of their income, should not be hit by unfair costs by agents or landlords.

& # 39; With the tenant account, rent becomes fairer and more transparent for everyone. & # 39;

The latest version of the bill also includes a proposal to prevent agents and landlords from hiring out tenants for extras, as they issue a £ 60 bill to mount a smoke alarm.

Polly Neate, chief executive of Shelter, said: "The bill for the renter's fee is good news for tenants and recent changes lead to millions of millions of people closer to significant protection.

& # 39; It's great that tenants can no longer get a fine of hundreds of pounds for something as simple as losing a key, but it still prevents landlords from charging a whole host of ridiculous things, like cleaning cobwebs from lighting fixtures.

The government must make the bill completely watertight before it comes into force by losing dishonest accusations. Only then do tenants get the absolute protection they deserve. & # 39;

Why does the government try to ban tenant fees?

There are indications that the fees paid by tenants have increased considerably in recent years.

Citizens & Advice found that 64 percent of tenants have problems with paying rent agency fees and 42 percent have to borrow money to cover costs.

In the meantime, a report by the charity organization Shelter discovered that almost one in four people in England and Wales believe that they have been charged unfair amounts by a rental agent.

Rental offices usually charge tenants £ 337 to rent a house – and many tenants in London are forced to pay more than £ 400.

This has led to concerns that the costs are increased instead of being charged.

For example, credit checks can only cost £ 3, but many rental brokers ask tenants of more than £ 50 for them.

In other cases, tenants can be charged for administrative work, such as rent renewals and inventories, when they have to be covered by the rent and management costs already charged to landlords.

According to the Letting Fees UK comparison site, in April 2016, a two-person household paid an average of £ 386 in rents, with costs ranging from £ 40 to £ 780.

The government predicts that the landlords account will cost £ 83 million, or £ 31 a landlord in the first year of implementation.

It could also cost rental agents £ 157 million and even lead to branch closures and job losses.

Tenants can jointly save £ 240 million per year. A government consultation showed that 93 percent of the tenants agreed with the proposals.

Tenants will save on average about £ 300 each time they move out due to the bill

Tenants will save on average about £ 300 each time they move out due to the bill

Tenants will save on average about £ 300 each time they move out due to the bill

Rental agents were less pleased with the progress of the bill.

"We are disappointed, but it is not surprising that the bill for tenants has passed the House of Commons," said David Cox, CEO of ARLA Propertymark.

& # 39; While the bill goes to the House of Lords, we will continue to work to ensure that parliamentarians understand what impact the ban will have on the entire private rental sector. & # 39;

Trader ARLA Propertymark has previously suggested that the bill could increase rents by as much as £ 103 per year for the average tenant.

Would tenants soon see the end of deposits?

In addition to the tenant reimbursement bill, the government is also conducting an investigation into alternatives to rental deposits, because it aims to make rentals more affordable.

The average rental balance in the United Kingdom is now £ 1,161 – an increase of 18.6 percent over five years. In addition, tenants often have to pay a new deposit when moving back before they get their old one back.

Ajay Jagota, founder of deposit-free rental company Dlighted, said: "We are talking about a system that slurps £ 4.2 billion from our economy, makes rent unaffordable and protects tenants of landlords free of charge against rent arrears and material damage.

& # 39; Intervention is needed to address this market failure, and it could be here before the end of the year. & # 39;

The results of the research will be shared in about three months.

Follow this link to see our overview of the alternatives for already existing deposits & # 39; s.