"It won't work" - industry hits out at latest fees ban proposal

The lettings industry has hit out at the Welsh Government’s proposals to ban agents’ fees levied on tenants.

A Bill was put before the Welsh parliament this week, as we reported on Letting Agent Today yesterday. 

Welsh housing minister Rebecca Evans says most tenants should only be asked to pay a month’s rent and a security deposit. “Fees charged by letting agents often present a significant barrier to many tenants, especially those on lower incomes” she claimed in the Cardiff parliament.

But David Cox, chief executive of ARLA Propertymark, says “We do not believe the Bill will achieve its aims, as our own research last year demonstrated that tenants will end up worse off and banning fees will not result in a more affordable private rented sector. 

“We’ll be liaising with the Welsh Government to ensure they understand the consequences of what ban will entail and how it will negatively impact all those involved in the private rented sector.”

Meanwhile the Residential Landlords Association also says the measure won’t work and tenants will be the most likely to suffer as a result of a ban. 

“Ultimately it will increase the pressure on the most vulnerable in Wales as they will no longer get the assistance from agents to obtain a tenancy. It will also shift costs onto long term tenants who have enjoyed incredibly low rent rises way below inflation for many years” says Douglas Haig, RLA director for Wales. 

“We had hoped that the Welsh Government would look to work with the sector to create a solution that allowed it to continue to provide the improvements in service and quality that we have seen over the last decade instead of jumping on a Westminster Government policy.”

However, the RLA says it welcomes the Welsh Government’s decision to allow flexibility with the time holding deposits may be retained; it says sometimes documentation isn’t readily available to the tenants, so this will allow time for both parties to enter a tenancy contract.

But it does have concerns over the ambiguity surrounding ‘prescribed limits’ for security deposits.

“There is no clarity in the proposed Bill as to what a ‘prescribed limit’ will be. The RLA believes that such an amount should be clarified within the Bill before enactment and not allowed to be determined by regulations brought in later” says Haig.

“Further we are disappointed that the Welsh Government has not sought to take the opportunity to introduce provisions for passport deposits or to enable a portion of the deposit to be passported from the first tenancy to the next one. This would lessen the burden on tenants when the time comes to move to another rental home.”