MPs vote against ban on fees

MPs have defeated an amendment to the Consumer Rights Bill that would have banned letting agents from charging fees to tenants.

In a vote at 7.30pm on Tuesday, 228 MPs voted to ban fees, but 281 voted against the proposed new clause – a margin of 53. All but three Conservative and Liberal Democrat MPs present voted against the fee ban.

Labour member for Walthamstow Stella Creasy tabled the opposition's motion in an effort to prevent agents charging fees to both landlords and tenants for the same transaction. She described it as “a fundamentally anti-competitive corporate practice”.

Earlier this week the coalition Government outlined its own amendment, which it says would see letting agents face fines if they fail to publish full details of fees charged to tenants.

Unsurprisingly the outcome of the vote went down well with letting agents.

Ian Potter, managing director of the Association of Residential Letting Agents (ARLA), said: “Labour’s amendment was ill thought through and its failure to pass illustrates this. I'm glad that the majority of MPs recognise that a ban on letting agent fees will only lead to an increase in rents, as landlords and agents seek to achieve returns. Fees are not arbitrary or unnecessary; they represent a business cost that those tabling the amendment failed to recognise. ARLA’s call, as ever, is for wholesale regulation of the market to ensure fair and transparent practices for all consumers, landlords and agents alike.”

Aston Mead managing director Charles Hesse said: “This ridiculous proposal was at base profoundly anti-tenant, and I’m relieved that the House of Commons has seen sense and voted against it. It’s a victory not only for the industry, but also for tenants themselves, who would have been lumbered with higher rents, less transparency, and a diminished rental supply as a result.”

Paul Weller, managing director of lettings specialist, Leaders, was pleased with the result but said the vote was a wasted opportunity.

“The vote should have been on banning all unregulated agents from practising. This would have enabled Parliament to tackle all the problems at the heart of our industry in one motion. 40% of letting agents are not members of a professional body so it is clear that self-regulation is not enough. What is needed is legislation that ensures that – as a minimum requirement – all letting agents are qualified, have client money protection and operate to an agreed code of conduct for the whole industry.”