Jenny Rathbone called on the Welsh Government to outlaw letting agency fees.
Leading a debate in the Senedd yesterday, entitled 'Will the Housing (Wales) Act 2014 be sufficient to deal with rogue landlords?, the Labour Assembly Member has challenged the Welsh Government to do more against unfair letting agency practices.
After owner occupancy, private renting is the 2nd biggest housing tenure in the UK. Letting agents are the middlemen who charge fees to both Landlords and Tenants. Thousands of young professionals and students needing accommodation in Cardiff Central have to pay letting agency fees that bear no relation to the services provided.
“The Housing (Wales) Act 2014 registration is an important first step in improving the quality standards of the Private Rental Sector. How well we regulate the private rented sector is keenly felt, particularly by young people. The Joseph Rowntree Foundation estimate 37% of all young people will be living in the Private Rental Sector by 2020. Students are particularly vulnerable to sharp practices. 18/19 years, first time away from home absolutely not aware of their rights.”
Following a recent Shelter report supporting a ban on Letting Agency fees in Wales, (http://sheltercymru.org.uk/wp-content/uploads/2016/08/Letting-Go-Email.pdf) Jenny Rathbone added:
"Research into 30 letting agents operating in Cardiff reveals widespread failure to display fees and charges to all. This is a breach of the Consumer Rights Act 2015. Fees as high as £150 per person were charged "to take the property off the market while we sort the contract.
Another charge in the small print of the contract included a blanket £65 per person for cleaning services at the end of the tenancy, even though the property was handed over in a filthy state at the beginning of the contract. Jenny will say “it is hard to see how a blatant fraud is not being committed here.
These fees are excessive and I suggest we should follow Scotland’s lead and outlaw letting agency fees to tenants altogether. The landlord should be paying the fee, not the tenant.”
In the past Welsh Government has argued this comes under consumer protection which is not devolved. However Jenny will reveal that legal advice obtained from the Head of Legal Services at the National Assembly for Wales states: “My view is that there is a very strong argument that letting agents’ fees are “devolved” so that the Assembly could pass a Bill on the subject, including to ban them.”
Only two of the 30 agencies researched, Cardiff Student Lettings and Luckey Lettings, do not currently charge admin fees to tenants.
Carl Sargeant, Cabinet Secretary for Communities and Children, stated that he would look again to see if banning letting agent fees was practical or feasible. He also stated that he would look at the perceived risk to tenants, as he would not want the fees just being transferred to the tenant
Carl also said:
"I would like to learn more from the evidence from the experience in Scotland before deciding whether these measures are necessary, but I’m grateful, again, for the Member raising such an important issue with us here today, and I will take this up with my team, and, hopefully, I can have some further discussions with the Member, who’s brought this short debate today".
You can watch the short debate here: