The Mayor of London, Sadiq Khan, this week declared that the Government’s proposed Tenant Fees Bill is a “missed opportunity” to protect the 2.4 million private renters in the capital, and criticised Ministers for breaking their promises to publish key plans for social housing and rough sleeping before the summer.
Extortionate fees and deposits mean London’s renters need to find nearly £3,700 each time they move home, compared with the nationwide average of £2,000*. In a joint letter to the Prime Minister, Sadiq, along with Crisis, Generation Rent and Citizens UK set out how a reform of private renting is desperately overdue.
The Mayor welcomed the Chancellor’s announcement in the Autumn Budget 2016 that deposits would be capped and fees banned – but is now concerned that several parts of the Tenant Fees Bill have been watered down. In addition, Ministers have failed to publish their Social Housing Green Paper and their Rough Sleeping Strategy – both crucial policy areas – before the end of July as promised. Sadiq believes Londoners are being let down by this lack of action.
During the development of the Tenant Fees Bill, the Mayor called on the Government to cap deposits at no more than three weeks’ rent. But despite Ministers earlier promising to support a cap of four weeks, they have backtracked and now propose six weeks, a measure that is not supported by any organisation representing renters.
In addition, the Bill contains loopholes that mean letting agents could still end up charging tenants excessive fees – now spread throughout a tenancy rather than charged up-front. It formalises agents’ ability to charge renters for basic services – such as responding to emergency call-outs – that should be covered by the management fee landlords have already paid. The Mayor and organisations representing renters say these measures mean the Bill “opens the door to an entirely new culture of exploitation”.
As the Bill is passes through its parliamentary stages, the Mayor is calling on Ministers to make amendments to give renters much-needed protection from exploitation by:
• capping rental deposits at three weeks’ rent, and holding deposits at one day’s rent, to reduce up-front costs for renters;
• scrapping provisions for new and potentially exploitative ‘default fees’ to be written into tenancy agreements, and for ‘charges to enact a change of sharer’ which will fall disproportionately on renters living in shared housing; and
• deterring bad behaviour by increasing the penalties councils can charge for illegal fees to £30,000, and by enabling tenants to directly claim back prohibited payments along with compensation worth up to three times the fee paid.