Labour Housing Leads from 19 London Boroughs have called for the end to letting fees and extortionate deposits that private renters are currently forced to pay. The councillors have echoed the Mayor of London’s calls for the Government to strengthen the Tenant Fees Bill, which is due to come back to Parliament in September, and protect London’s 2.4 million private renters.
In 2016, the Government announced that it would introduce a Tenant Fees Bill that capped deposits and banned letting fees. However, Labour councillors are concerned that the draft Bill has been watered down and will fail to protect private renters from extortionate letting fees and deposits, unless it is amended.
19 Labour Housing Leads of London Boroughs, along with James Murray, Deputy Mayor for Housing and Residential Development, have written to the Housing Minister, urging him to set the cap for deposits at three weeks’ rent. The Government previously said the cap would be set at four weeks but it has extended to six weeks in the draft Bill, a move that is not supported by any organisation representing private renters.
The letter also sets out concerns that private renters could in fact end up paying more letting fees than before. A loophole in the draft Bill enables letting agents to charge renters for basic services across an entire tenancy, rather than charge them up front. This could open renters to an entirely new form of exploitation.
Cllr Diarmaid Ward, Executive Member for Housing and Development, London Borough of Islington, says:
“Many renters are not only forced to pay extremely high rents, but also extortionate deposits and fees each time they move home. The Tenant Fees Bill is an opportunity to protect renters from being ripped off by unscrupulous letting agents, but the Government’s current draft actually risks making the situation even worse for people across London.
“The loss of a private tenancy remains the single biggest cause of homelessness. We cannot wait any longer for action on rip-off fees and for stronger rights for private renters, particularly in London where the cost of private renting is cripplingly high.”
A spokesperson from London Renters Union, says:
“The Tenant Fees Bill does nothing to change the hard realities of the private rental market, where millions of people are stuck paying exorbitant rent, fees and deposits they cannot afford. It’s unacceptable that an increasing number of Londoners are facing eviction and homelessness because they cannot keep up with extortionate rent and fees.
“Renters across the capital have had enough. We’re standing together against exploitative landlords and agents to give our housing system the reboot it needs. We need renters’ rights and stronger protections, not dodgy loopholes for letting agents to charge us even more.”
The letter also urges the Housing Minister to increase the penalties that local councils can charge for illegal fees to £30,000. Labour councils in London have been working hard to take action against rogue letting agents and landlords, including by issuing fines. For example, Islington Council has secured over £100,000 of fines against letting agents and landlords who were renting out unlicensed properties to tenants. Increasing the fines that London councils can impose on agents charging illegal fees would further deter bad behaviour.
In a further move to strengthen renters’ rights, the councillors have called for tenants to be able to directly claim back illegal letting fees along with compensation worth up to three times the amount that they paid.
The Labour Party has pledged to legislate to ban letting agency fees for tenants, give renters new consumer rights and implement controls on rents.
Analysis from the Labour Party shows that soaring rents are costing London families more than £300 extra a month compared with 2010. This means one million private renters are having to find £3,600 a year more for rent.
The Tenants Fees Bill returns to the House of Commons for debate on Wednesday 5th September.