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Welsh Government to introduce Bill to prevent unfair fees

Monday 26 June 2017

On 27 June 2017 the Welsh Government’s legislative priorities for the coming year (2017-18) were outlined in an annual statement by the First Minister, Carwyn Jones. It included news that the Welsh Government will take legislative action to tackle the fees charged to tenants in the private rented sector.

Speaking in the Welsh Assembly, the First Minister said, “There is increasing evidence that suggests the current fees, mainly charged by agents, are a barrier to people accessing private rented housing, and, once accessed, that fees can discourage people from moving home.”

Mr Jones added, “Tenants can face significant upfront costs, which include a month’s rent, a substantial security deposit and agency fees for securing a tenancy. The fee can be made up of multiple charges but is often a fixed charge or based on a percentage of the property’s rental costs. Too often, tenants do not know what these costs cover.”

He went on to say, “So, we will introduce a Bill to prevent unfair fees from being charged to tenants and prospective tenants. This will provide those in the private rented sector with clarity about the costs involved and ensure the system is fair, equitable and sustainable.”

In March this year, ARLA Propertymark sent a joint letter along with the Residential Landlords Association to Carl Sargeant AM, the Cabinet Secretary for Communities and Children. The letter pressed the Ministers for a meeting to discuss the implications of the UK Government’s decision to ban letting agent’s fees to tenants and how any subsequent ban in Wales would affect the sector as a whole.

In the Queen’s Speech on 21 June the UK Government announced that proposals will be brought forward to ban unfair tenant fees in England, promote fairness and transparency in the housing market, and help ensure more homes are built. They also said that some minor amendments to the Consumer Rights Act 2015 may apply to England and Wales.

An eight-week consultation on banning letting fees paid by tenants closed on 2 June. However, the General Election meant that the Department for Communities and Local Government’s planned roadshow events around the country relating to the proposals did not go ahead. The UK Government have said that the responses to the consultation will be used to inform the draft Bill.

Commenting on the Welsh Government’s legislative priorities, ARLA Propertymark Chief Executive David Cox, said:

“We are disappointed that the First Minister has now openly stated that the Welsh Government will bring forward a Bill to ban letting agent fees to tenants in Wales. These fees represent legitimate business costs for the services required in order to ensure that a property is fit to rent. We believe that fees should be open, transparent and reasonable.

“As set out in the Consumer Rights Act, since November 2015 all letting agents in Wales must publicise their fees, so if this isn’t happening then we need to see more enforcement and greater resources to ensure Council’s prosecute those agents who aren’t adhering to the rules.

“Wider economic factors and a shortage of affordable housing are keys issues that prevent people from entering the housing market. We will continue to engage with the Welsh Government and work across the sector because it’s vital that the decision makers involve the industry and listen to what we are saying.”

Read the full Legislative Programme