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However, as with every Tory policy that initially seems to benefit us little guys, the devil really is in the detail.
The Tories initially proposed the policy in November 2016, and it has taken them a full year to finally bring the legislation to a public consultation.
And guess what? After consulting estate agents and landlords on the proposal, the most likely outcome of the Tories’ plans to ban letting agent fees will be that estate agents and landlords are simply going to hike our rents in response.
Yes, with the Tories only proposing an arbitrary ban on estate agent fees, and with absolutely no corresponding measures in place to either increase Britain’s dwindling housing stock or to ensure a ceiling on the cost of private rents with a rent cap (as Labour are proposing), estate agents and landlords will be able to simply offset the burden of the ban on fees onto private renters like you and me.
Estate agents and landlords reportedly rake in approximately £156m from fees every year, and by conveniently failing to close glaring and blatantly obvious loopholes, the Tories’ imminent ban on estate agent fees will yet again benefit already wealthy property owners rather than those of us who are just about managing to pay the rent.
During the public consultation on the policy, the Tories asked tenants, landlords and estate agents:
What do you think will be the main impacts of the ban on letting fees paid by tenants?
Tenants who responded to the consultation ‘believed that the impact of the ban would be positive resulting in better affordability and flexibility for tenants as well as improved transparency and competition in the sector.’
However – and here is the real kick in the teeth for private renters – the ‘majority of’ estate agents and landlords argued that the ban would result in ‘financial pressures’ on them, leading to redundancies or agents going out of business, with the most common response being that they would simply:
increase their rents
And, despite a staggering 87% of tenants, and even 54% of estate agents saying that further action was needed to regulate the sector in addition to the ban on letting fees paid by tenants, the government explicitly ruled out any further regulation.
The Tories stated that whilst:
there were strong calls from industry groups and professional associations across the sector as well as tenants for greater regulation.
The predominant suggestion from tenants was for rent controls or caps.
The government said they do not believe that:
capping or seeking to control rent is an effective way to improve affordability for tenants.
Their reasoning for ruling out a rent cap was extraordinarily tenuous – arguing that ‘evidence shows that rent control’ can lead to ‘higher rent’.
Yes the Tories really are arguing that ‘rent controls’ – i.e controlling how much rent people pay – will somehow lead to people paying ‘higher rents’.
Which leads me to ask two pertinent questions: what f*cking planet are the Tories actually on, and do they really think they can get away with treating the public like absolute imbeciles much longer?
A Lose Lose Situation For Renters
As somebody who knows, in intimate detail, just how financially debilitating the initial, and ongoing, cost of renting privately is, something needed to be done urgently to curb the financial burden on the shoulders of those currently unable to save enough for a deposit to buy a house.
For those lucky enough to own their own house, or for those who are unaware of just how much estate agents are charging for private rented properties, this is a breakdown of what myself and my partner had to pay up front for a six month contract on our new rented property in June of this year:
- £1200 deposit
- £600 first month’s rent
- £300 pet deposit
- £360 reference fees
- £90 guarantor fees
Total: £2550 up front
Furthermore, we were forced to vacate our previous property because the landlord decided to sell up – meaning that, had we not been able to scrape together just enough money to pay the fees, we literally would have been out on the streets.
Thanks to current Tory policies, all the power in the housing market is firmly in the hands of property owners. And with the government doing absolutely nothing to increase Britain’s stock of genuinely affordable houses – a move that would decrease demand and reduce the cost of renting – it really is little wonder then that the rate of homelessness in this country is soaring.
Yet, whilst the ban on letting agent fees is a genuinely good step in the right direction from the government, it is obvious from the lack of corresponding measures to curb agents from offsetting the financial burden onto renters, or to actively cap rents as Labour is proposing, that the government are merely paying lip service to a huge national housing crisis.
During the Autumn budget, Philip Hammond also pledged that the Tories would abolish stamp duty for houses under £300k (and under £500k in London). However, much like the Tories imminent policy to ban estate agent fees, the cost of abolishing stamp duty, combined with the incredible demand for properties in Britain, means that, according to the OBR, the cost of houses would simply rise as a result.
The Tories obviously want to look like they’re addressing the concerns of ordinary people. However, when private renters see that their rents are going up because of government policy, they are extremely unlikely to look kindly on it.
If the government don’t take urgent action now, and with a resurgent Labour party waiting in the wings promising radical policies to tackle the root causes of the problem, the Tories will inevitably pay the price for their deliberate inaction at the next election.
Theresa May and the Tories should take note: you really can’t fool the public for much longer with only kindly platitudes.
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