Renters’ Rights Bill – A solution to ‘rogue’ agencies or a disaster for the market?

Discussions surrounding landlord and letting agents’ fees has attracted much critical acclaim over the years. Accordingly, a bill has been introduced in Parliament which seeks to abolish fees charged to tenants. 

But what will it entail and what might the repercussions be?

The Renters’ Rights Bill, introduced by Lib Dem and supported by Labour, passed its second reading in the House of Lords just a few weeks ago. It will ultimately amend the Landlord and Tenant Act 1985 by stopping letting agents from charging prospective tenants, including; registration fees, referencing fees, administration fees, inventory check fees, and renewal and exit fees.

Whilst the transparency of service quality is surely a good thing, what impact might this have? The most immediate supposition is surely that letting agents and landlords alike will seek to recover such losses. Pursuit of lost fees may be reflected in rental increases for example. Alternatively, and perhaps a worse outcome than the former, is that cutting costs may have an adverse effect on the service provided to private tenants. Unsatisfactory service is at the essence of the Bill, so the repercussions could potentially end up being somewhat counter-productive.

Notably, government spokesman Viscount Younger said: “The Government is clear that the vast majority of letting agents do provide a good service to tenants and landlords and that most fees charged do reflect genuine business costs. And certainly here, at MTM, our team relentlessly strive to ensure our customers are happy and receive the best service out there. 

The new Bill also seeks to make further amendments by changing the new Housing and Planning Act 2016 to open up the register of rogue landlords and letting agents to tenants and prospective tenants. The register, which has yet to surface, is currently only intended to be accessible to local authorities and the Government. It is proposed that any landlord or agent on the database would not be granted an HMO licence.

Check out the Hansard manuscript here;

https://hansard.parliament.uk/lords/2016-06-10/debates/16061029000340/Renters%E2%80%99RightsBill(HL)