The Ministry will continue with a total ban on tenant fees and say many agents do accept fees are unfair, but the ban will push out rogue operators.
Today, the Government has rejected an online petition signed by nearly 10,400 estate and letting agents proposing a cap on tenant fees rather than an outright ban.
The petition was started by 29-year-old letting agent Rob Farrelly, who began his own business Friend & Farrelly Property Services eight years ago The e-petition 206569 was signed by agents all over the UK.
Responding to the petition, the Government have revealed their plan to continue with the the draft Tenant Fees Bill as published on 1st November, advising that it wishes to see a rental market in which landlords and not tenants are the primary customer of agents.
They also claim that “many letting agents and landlords acknowledge that fees charged to tenants are currently not at a level that is justifiable and agree that intervention is necessary” and believe that by introducing a ban, transparency of services and affordability will be improved for renters.
“The Government does not believe that a cap would be effective and is likely to lead to a race to the top in terms of fees charged. A ban is easier to understand and enforce.”
Agents are also able to see a glimpse of the future shape of the industry from the response to the e-petition, which admits that agents will have to reconsider their business models when the bill comes into force, at the earliest in April next year.
This, the Government says, will give agents time to “negotiate their contracts”
Also, the Government expects more landlords to shop around for the service they want from letting agents and that therefore those which offer the best value for money will survive, while those that don’t are likely to go under.
It also says a fees ban will squeeze out rogue agents, who will no longer be able to “exploit their position between landlords and tenants”.
The response by the Government will now be considered by the Petitions Committee of 11 MPs and, if it reaches 100,000 signatures, be debated in Parliament.
Reference: The Negotiator