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Tenant Fees Bill must go further, says Khan

Words: Laura Edgar
Housing / iStock-807295382

The government’s proposed Tenant Fees Bill is a ‘missed opportunity’ to protect people who rent in London, says Mayor of London Sadiq Khan.

In a joint letter to the prime minister, Khan, Crisis, Generation Rent and Citizens UK have set out how a reform of private renting is overdue.

Renters in the capital have to find nearly £3,700 each time they move home compared with the nationwide average of £2,000 owing to “extortionate fees and deposits”, according to City Hall analysis, explained the mayor.

During the development of the Tenant Fees Bill, the mayor suggested that the government should cap deposits at no more than three weeks’ rent, but the bill proposes six weeks.

Khan believes that the bill contains loopholes that mean letting agents could still end up charging tenants excessive fees, which would be 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,” says a statement from the mayor.

Khan and organisations representing renters say these measures mean the bill “opens the door to an entirely new culture of exploitation”.

As the bill passes through its parliamentary stages, the mayor wants ministers to make amendments to give renters much-needed protection from exploitation. These include capping rental deposits at three weeks’ rent and holding deposits at one day’s rent; scrapping provisions for new and potentially exploitative ‘default fees’ to be written into tenancy agreements; and enabling tenants to directly claim back prohibited payments along with compensation worth up to three times the fee paid. 

Khan said: “Rising rents, ongoing insecurity, and in too many cases poor-quality housing make the 2.4 million private renters in London amongst those worst-affected by the housing crisis. By backtracking on proposals and watering down the strength of this bill, ministers are in danger of opening the door to an entirely new culture of exploitation, with the legislation left unfit for purpose and simply a missed opportunity to truly help renters.”

The mayor also made reference to the lack of a social housing green paper, which was expected before Parliament’s summer break.

“Social housing residents need a much stronger voice, and yet the promised green paper about this is nowhere to be seen. Rough sleeping is at a crisis level, yet the government’s strategy remains unpublished. Ministers need to show they mean what they've said by urgently taking action – with increased funding – rather than breaking their promises and hoping no one notices.”

Jon Sparkes, chief executive at Crisis, added: “Thousands of people across England are trying to move on from homelessness, but they have no way of finding a home. There’s a shortage of social housing, and deposits and other fees for private rented housing are hundreds of pounds – amounts that many homeless people simply can't afford. This is a desperate situation, and it's all the worse because our research shows that homelessness can be ended with the right policies in place.

"The Tenant Fees Bill is a chance to address some of these issues – but we're concerned that the bill as it stands actually risks making the situation for renters worse. For example, it only proposes capping deposits at six weeks' rent, which could make deposits at this high level the norm. Among other amendments, we're calling for this cap to be set at three weeks, to reduce the upfront costs that shut out homeless people and others on low incomes.”

Image credit | iStock