On Tuesday night, the government made some technical changes to the Tenant Fees Bill which barely anyone noticed.
But they should. Because, with these changes, the ban on tenant fees will save private renters collectively millions of pounds.
In 2016 the Chancellor announced a ban on letting fees to great fanfare.
And quite right too: Shelter research shows on average private renters in England had to pay £246 in letting agent fees, and families had to pay even more.
But since that announcement, the average renter can be excused for being a bit confused as to what happened next, when they continued finding themselves slapped with enormous fees.
In fact, politicians were still debating what should be in the deal, and it has been watered down quite considerably.
The problem was that there was a gaping loophole smack bang in the middle of the bill. Something called a “Default Fee” would have allowed landlords and agents to carry on charging private renters even after the ban had happened.
These are charges for things like losing a key or breaking part of your tenancy agreement.
The problem was there were initially no real controls on how big these charges could be. So you got people being charged £100 for “cobweb removal” and £10 to iron curtains. (These aren’t jokes: feast your eyes on the top ten.) Inevitably then, agents would exploit this loophole – and they even said so themselves.
This all meant that renters would have remained at the mercy of agents and landlords.
But this is where organisations like Shelter, Citizens Advice and Generation Rent come in. Together we raised our serious concerns about this to the government. Liberal Democrat & Labour Peers also worked tirelessly behind the scenes and in Parliamentary debates to make the case to government that default fees needed tightening.
And, lo and behold, the government listened to these concerns and acted.
On Tuesday night it stepped in by tabling amendments to the ban which now tightly define what makes a default fee.
That means the only things that can be charged as default fees are lost keys and late rent. So agents and landlords who were planning on drawing up a list of make-believe charges now simply can’t.
In our eyes, this fully closes the default fees loophole once and for all. This is a big win and a true testament to cross-party working.
Deposits, capped
As well as doing away with the default fee loophole, the government also put forward amendments to cap security deposits at five weeks’ rent instead of six.
Seeing as we all know the astronomical cost of renting, this is a big deal and also very welcome.
Shelter research shows it is in fact the equivalent of £150 or more in over half of local authorities.
The final amendment laid yesterday introduced some additional protections for renters around holding deposits. This is the refundable deposit used to reserve a property before the tenancy agreement is signed.
Following these changes, when a tenancy isn’t going ahead, a landlord or agent will have to set out in writing their reasons for retaining some of the holding deposit within seven days of deciding not to go ahead with the tenancy. This will give clarity to renters and make it easier for them to challenge if they feel their money has been withheld unfairly.
Thanks to the recent changes, which were the result of true cross-party collaboration, the government is set to deliver a huge victory for renters. We hope this will become law by January next year and be in force later in the Spring.
There’s no doubt this bill will make renting fairer and more affordable for all renters. But it must be just the beginning.
Greg Beales is campaign director at the housing charity Shelter.
