London Borough to Ban Letting Fees – but only if you feel like it!

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The London Borough of Hackney, home to Shadow Home Secretary Diane Abbott, co-host of the London Olympics in 2012, and birth place of Jeremy Beadle has unveiled its latest attempt at making  history by announcing its intention to ban letting fees – voluntarily.

A voluntary ban?

That’s right, a ‘ban’ which is ‘voluntary’.

Or to put it another way – to officially or legally prohibit the charging of fees, without officially or legally requiring anyone to comply, which must be entered into at the discretion of those detrimentally affected.

We’re not making this up, for the avoidance of doubt Cllr Sem Moema, the Borough’s mayoral advisor for private renting and housing affordability, has written to interested parties stating:

“I’m proud to say we’ve launched England’s first voluntary letting fee ban – encouraging our borough’s letting agents to scrap unnecessary fees and charges ahead of the Government’s long-delayed legislation”

According to local press reports Cllr Moema is optimistic that letting agents will sign up to the scheme, which she describes as ‘pioneering’.

Better Renting

This forms part of the Borough’s ‘better renting’ campaign, which has a very important point to make in a part of London with 2,800 homeless households living in temporary accommodation and where one in three households rent privately.

The campaign is without a doubt well-intended, but you have to wonder about the effort which has gone into publicising a ‘ban’, which is not only voluntary but of something that is to be prohibited in due course anyway.

In the aftermath of the Government’s announcement of their intention to ban fees (that is to actually ban, with rules and sanctions) it has become clear that some letting agents are guilty of imposing some pretty nasty, opaque, and largely unjustifiable charges on tenants. These agents should be dealt with, and perhaps the only positive thing about the blanket ban is that they will (probably) no-longer be able to get away with it.

That being said, my suspicion is that these same letting agencies make up a large proportion of those not complying with advertising guidelines, fee transparency, EPC regulations and a whole plethora of other statutory responsibilities local authorities are already able to enforce against.

Powers to improve housing?

It is evident from Hackney’s campaign that they are very concerned – quite rightly – about the quality of landlords, letting agents and properties in the Borough. They would like more powers and the ability to enforce.

However looking at the figures available for housing related prosecutions in London, which granted are two years old, Hackney ranked 13th out of 33 boroughs and only accounted for six prosecutions during the three years leading up to the end of 2014. Neighbouring Newham managed 359 over the same period.

Perhaps the Council would be better served focussing on enforcing against the criminal offences committed by the minority of landlords and letting agencies failing to live up to the high standards expected and demanded by those calling the Capital home before moving on to lobby for the next set of regulations local politicians would like to see added to their arsenal.

What now?

The Hackney ‘ban’ is of course an aspiration, it has no teeth and will in all likelihood be forgotten about a couple of press releases down the line. Lots of agents are already turning to alternative ways of doing business that minimise fees, statements like this will have little impact.

In the meantime the majority of responsible letting agents who charge justifiable fees and commissions are busily trying to adjust their business model to accept the huge cash flow disruption that the ban will eventually cause.

Maybe it’s too much to ask that the Council takes this into account and tries to support local rate paying businesses. After all there aren’t that many of us left on the highstreets.

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