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Government / Local politics

Renters can’t wait for the government to scrap letting fees – so Hackney council is stepping in

A Labour councillor on the London Borough of Hackney’s plans to reform its rental market.

Four homes, four landlords and four completely different experiences: in my 15 years as a renter in London, I’ve experienced first-hand the good, the bad and the ugly of the private rented sector.

My experience isn’t unique. In my borough of Hackney, two in three private tenants say repairs aren’t done when needed, while their rent has rocketed by 20 per cent in just five years – far outstripping wage growth. This is a story repeated across London.

Around 32,000 homes are privately rented in Hackney, and their tenants are too often forgotten in a government housing agenda obsessed with home ownership and local government’s traditional role as a social landlord.

That’s why the government’s announcement last year that it would seek to ban extortionate, arbitrary letting agent fees was welcomed by renters and good landlords alike. If you’ve rented in London, you’ll know how vague and ridiculous these fees are. I remember baulking at my landlord’s demand for a £300 fee to renew my contract – not just from me, but from everyone else in my house. That’s why in Hackney we’re taking matters into our own hands to launch a campaign to end letting fees now.

I’m fortunate enough to now have a stable tenancy with a considerate landlord, who I know won’t hike up the rent at the end of each year, charge through the nose just to renew my tenancy or ignore my calls when the boiler breaks.

But while the Prime Minister’s new chief of staff, Gavin Barwell, said ministers were “determined” to end hidden fees, we’ve seen little action to make it happen. Renters will rightly be concerned that – like endless commitments to build new homes – these words won’t translate into delivery. The Draft Tenants’ Fees Bill announced in the Queen’s Speech hasn’t been published or given any parliamentary timetable – meaning it could still take years for any, potentially watered down, measures to come into force.


Hard-up Londoners can’t afford to wait that long. The Institute for Fiscal Studies’ report into poverty and inequality showed this week that, while incomes in the capital are 10 per cent higher than the rest of the UK, they sink below the average once unaffordable housing costs are taken into account.

That’s why this week Hackney Council became the first local authority in England to launch a voluntary ban. We’ve asked all letting agents in our borough to do the right thing and scrap these unnecessary fees ahead of national legislation.

Our first supporter, independent Stoke Newington business Julian Reid Estate Agents, are already showing how not charging these fees is good for everyone: they say it doesn’t disadvantage them against their competitors and supports their business model.

And they’re right. Research from Shelter shows that in Scotland – where fees were banned in 2012 – renters, landlords and the industry as a whole have benefited. And crucially, the evidence showed that landlords haven’t passed on the fees to tenants through increased rent.

The new housing minister, Alok Sharma, must resist the strong voice of the letting agent lobby and push through this legislation without delay. But while it’s vital action, banning fees risks tackling the symptoms, not the causes, of the housing crisis.

Ultimately, the solution to rising rents and house prices that leaves a generation of renters trapped in a cycle of unstable tenancies is to build more homes – something the government has consistently failed to do. Local government stands ready to fill that void – Hackney is already delivering more than 9,000 homes in its self-funded regeneration programme.

We’re playing our part, but we’d like to do much more to meet this ever-growing demand. The restrictions on local authorities’ ability to build new homes has exacerbated London’s housing crisis and put the brakes on any effective ways to resolve it.

Simply lifting the borrowing restrictions placed on councils would allow them to unleash a new generation of housebuilding – helping to meet demand and bring down prices. That can only be a good thing.

In the meantime, we’ll continue to stand up for tenants and make their voice heard. Scrapping letting fees is a small, welcome step towards that – but when a third of residents in my borough rent privately, they deserve more.

Councillor Sem Moema is an advisor on private renting and housing affordability to the mayor of Hackney.

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