Criticism of ban and deposit cap; support for client money protection

Trade organisatons have reacted predictably to the government’s latest announcements and publications concerning the private rental sector.

Yesterday the Department of Communities and Local Government published a draft of the Tenants’ Fees Bill, which effectively bans letting agencies’ fees on tenants; it also published a consultation document on making client money protection mandatory for letting agents, with associated other regulations of the private rental sector.

”We have discussed the proposal to ban letting agents fees with government ministers and officials many times since the announcement. Having now seen the Draft Bill, it is essential that during its passage through Parliament, this legislation is shaped to make it fair to consumers, while supporting businesses to carry out the work necessary to create and maintain successful tenancies; including legal requirements such as Right to Rent checks” says ARLA managing director David Cox.

A statement from the National Landlords Association said it was disappointed that the government considered a cap on security deposits necessary at all, but if that was the case it was pleased that the cap was extended to six weeks’ rent from the original proposal of four weeks’ rent. 

“Since the plans were announced we have been lobbying the government and we met with the Minister of State for Housing and Planning, Alok Sharma MP, in September in order to press him to rethink his plans for a cap; taking into account the needs of those living and working in the private rented sector” says Chris Norris, head of policy at the NLA.

“Whilst we remain disappointed that the government continues to believe a cap is necessary, extending it to six weeks rent will reduce those households and landlords disadvantaged by the policy significantly” he adds.

Meanwhile ARLA’s David Cox says of the cap: “We are very pleased to see that government has listened to our call and increased maximum security deposits from four to six weeks and are encouraged that it appears those tenants who wish to break their contract will have to cover the legitimate costs of finding a new tenant.”

And Isobel Thomson of the National Approved Lettings Scheme added: “NALS has consistently said that any fee ban needs to be set within a wider context of regulation of lettings and management agents as well as mandatory client money protection  and it would appear that government is listening. ... Work now starts for agents in engaging with their local MPs who will be scrutinising the Bill in Parliament. MPs need to understand the implications of what on the surface appears to be a quick win for tenants but which will ultimately end up costing them more through increased rent and will disadvantage the most vulnerable tenants.”  

John Midgley, chair of SAFEagent - a campaign set up to secure mandatory client money protection: issued a statement saying: “This consultation is a first vital step in achieving that goal. The SAFEagent campaign will continue with its work in the meantime in raising consumer awareness, building on everything we have achieved over the last six years.”