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MARCH 26, 2015 | BY A & S Property

MPs want research on lettings agency fees ban

The next government should assess the impact on the private rented sector before making any decision to ban, or rule out a ban, on letting agents' fees in England, according to an influential committee of MPs.

The Communities and Local Government committee, in a report concluding its work in this parliament, says the evidence from the existing ban in Scotland is not strong enough to reach a view on the impact of a possible ban in England.
Evidence to the committee from bodies in Scotland appeared to be divided on whether any change in rent levels could be directly linked to the ban, the committee says.
Its final report says the next government should ensure it bases its policy on any possible ban on evidence of its net impact on tenants’ costs and the private rented market.
"Last week the government announced it had considered but ruled out a ban on fees, as this will simply increase rents for tenants. Labour Party policy is to introduce a ban in England. Neither position is underpinned with convincing evidence,” according to Clive Betts MP, chair of the Communities and Local Government committee.
He says “the jury’s still out” on the question of whether the Scottish fees ban had led directly to higher rents. “None of the evidence from Scotland attempted to calculate the net effect on housing payments for tenants over the whole life of a tenancy. Nor did it look at the wider operation of the private rented market—for example, whether a ban leads to any change in the use of agents; in the costs they charge to landlords; or in the length of tenancies offered," said Betts.

 "Even if a ban is shown beyond doubt to lead to higher rents, it should not be ruled out. It may enable people to spread the costs of renting more comfortably across the duration of their tenancy.”


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