Deputy leader Nick Clegg unveiled his plan during yesterday’s Common’s question session following calls from Labour deputy leader Harriet Harman to ban agencies charging tenants as well as landlords.
Clegg agreed there was a ‘problem’ over agencies’ charges but said scrapping tenant fees may lead to higher rental costs.
“That is why we will be announcing today that we will be placing new obligations on agents to publish in full transparency what kind of fees they are charging so people can shop around and get the best deal available,” he said.
Harman said transparency “is not good enough” and warned agents needed to be prevented from ripping tenants off with dual charging.
But lettings agents have argued that by removing the up-front fees tenants must pay to arrange their tenancy landlords would be left to shoulder the bill which would be offset by higher rents.
Your Move and Reeds Rains director David Newnes said: “Tenants could very well end up paying a lot more not less. In reality this legislation would only add to the cost of living challenge.”
But in a separate debate yesterday on the Consumer Rights Bill shadow minister for business and innovation Stella Creasy fees charged to tenants were not a legitimate cost.
She said that rents need not rise because the fees being charged were not indicative of a service being provided but profits being made.
She added that telling tenants what the fees were up-front was akin to tying someone to the train tracks and giving them a timetable.
Earlier this month Ed Miliband launched his controversial three-point plan to tackle the ‘terrible instability’ of the rental market by axing letting agent fees for tenants, capping rents and introducing three-year tenancy agreements.
