Ban on letting fees could be disaster for tenants, ARLA president warns

A ban on letting agent fees charged to tenants could have a disastrous effect, the president of ARLA has warned – heralding, she said, a possible return to the exploitation of tenants during the notorious Rachman days.

Labour proposes the ban on fees charged to tenants in its manifesto, while the Greens and Lib Dems both have similar policies. Either could form part of any new coalition.

ARLA president Valerie Bannister queried who would be looking after tenants’ interests if agents no longer had the resources to do so.

She said that the effect of a ban could be enormous with knock-on implications for the entire industry.

She spoke out as Labour leader Ed Miliband was literally setting his policies in stone. On his 8ft limestone monument, “action on rent” is one of six engraved Labour pledges.

Bannister said a ban on charging tenants fees would have far-reaching consequences for tenants and the entire lettings industry.

“I would hate to see us go back to the 1980s when I started out, and it was impossible to get hold of an inventory clerk for love or money. That is why so many agents had to learn to do inventories.

“I see exhibitors at our own ARLA conference and at other events, and all would be affected by a ban. They would all fall away.”

She also warned that landlords would exit the sector – not immediately, she said, but gradually.

She emphasised: “As an industry, we have to drive tenants to understand what they are paying for.”

Bannister said that letting agents currently do an enormous amount of work on behalf of tenants, shouldering the decline of the social rented sector.

She said: “One ARLA regulated firm has a young man who is a paraplegic and can only move his head. He needs 24-hour care and could not even sign the tenancy agreement.

“The landlord concerned is a novice.

“However, this agent did all the right things to secure the tenant and guide the landlord – who, incidentally, has Power of Attorney on a property owned by the father who has gone into care and therefore needs the rental income to fund that.

“We are talking about a moral compass here.

“I have two questions to ask: how did such a tenant, who 30 or 40 years ago would have been given a council house, end up in the private rented sector?

“This particular pair has been dealt with by a regulated firm, but is it right that such a vulnerable tenant and new landlord could have been at the mercy of an unscrupulous agent, unregulated by any industry body? Or that the tenant could have been dealt with by an unscrupulous landlord?|

Bannister said that many cases dealt with by letting agents on a day-to-day basis are highly complex.

She said: “It is a real concern for the long-term health of the market that if Labour wins, could there be a return to the Rachman era? I do hope not.”

She said that ARLA was not telling its member agents how to vote, adding: “ARLA will continue to promote standards and work with the housing minister, whoever that may be post-election.”

Bannister said: “The Association’s position is not to be political. However, there is no doubt that housing has become a political football.

“What we are talking about now is the overall security of the private rented sector, and having the homes available for the people who need them.

“Too much hard work and investment has gone into this sector for it to be endangered.”

Valerie photo ARLA

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7 Comments

  1. Jireh Homes

    Whilst not disagreeing with concerns, in Scotland it ahs been illegal since 2012 to charge a tenant for the likes of referencing, administration or agency fees (including half share of inventory and check-out inspection).  This has increased the financial burden on landlords and a disincentive to consider short term leases.

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  2. Mark Reynolds

    Is this not too little too late by ARLA? The date on this article is 5th may 2015 – I’m adding this in case the date is dynamically updated, and now ARLA come out and speak.

    BANNISTER states she will work with the housing minister whoever that may be…Does this mean she has done so already with Conservatives? I would be interested to hear what ARLA are doing for their members at such a crucial time in the private rented sector.

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  3. RealAgent

    I agree with Mark above, where was this press release weeks ago when it actually mattered? I think both ARLA and the NAEA need to ask themselves some serious questions about their performance in this election. How can you say the organisations role is not to be political …Of course it is when politics affects the very industry you report to represent!

    Shelter have managed to get something released almost weekly. Both of these so called industry organisations can barely muster a whimper. Disgraceful.

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  4. Agent for Change

    I agree with RealAgent. Very little from ARLA and the NAEA at this really crucial time. Shelter and even Generatuion Rent seem to be across the media and its only NLA who seem to have any voice for the sector and they are not particularly pro agent.

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  5. Woodentop

    Left it late, not a hope as it is in the manifesto. This should have been actioned last year when it was being talked about in the house of commons.

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  6. OAKLET

    WAY TO LATE TO THE PARTY VALERIE! – Labour already carving it in stone, loads of room to influence them now if they do get in. Not the representational voice or noise that should be made for Letting Agents, where is the ARLA going to be as member’s decline as the industry shrinks and membership falls off if detrimental legislation get implemented?

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  7. Robert May

    This a bit odd, I am quite surprised that Mx Bannister has  actually said  what she has at all.
    An agent’s responsibilities stops with the landlord, their interests and their property. It is simply a conflict of interest to  take anything from  the 3rd party and give the 3rd party  any expectation of protection.
    Exploitation of tenants? Tenants and prospective tenants are being exploited! Talk of the ban on fees has been coming at us for years. The LAT archive is littered like a motorway with rubbish about fees to tenants and Shelter’s somewhat questionable lobbying of his former boss.
    Going right back prior to Safe Agents the mechanics to control rogue agents and protect  tenants was devised. A working solution  developed, tested and implemented across a significant part of the industry,  but not in the format it will take should a ban come to pass, to the extent that those developed and tested it didn’t understand its true destiny.
    I am fairly relaxed about a ban on Agents fees, there are a number of benefits available to the honest sector of the industry who  won’t change what they are doing till forced to.

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