Tenants’ union takes to the streets to celebrate ban on letting agent fees

Members of tenants union ACORN Brighton held a demo to seize the fees
Members of tenants union ACORN Brighton held a demo to seize the fees

Renters will no longer have to pay costly letting agent fees after new legislation took effect on Saturday, June 1.

The Brighton wing of the UK tenants union marched down Lewes Road on Saturday to mark the passing of the Tenant Fees Act.

ACORN Brighton members Ellen Musgrove and Naomi Gann

ACORN Brighton members Ellen Musgrove and Naomi Gann

ACORN Brighton members wore party hats and blew horns to commemorate the day the new law took effect in England, as part of a national Seize the Fees day of action.

Membership officer Sophia Odgers-Roe said: “Without the pressure that ACORN and other unions have put on the government, the agency fees would not have been scrapped, so it’s a massive win for us.”

The group visited Lewes Road letting agents to ask them to sign a pledge to abide by the new law.

Ms Odgers-Roe said: “We only had one estate agent sign today. Many of them had shut but we have emailed them, so we really hope we hear back.

Naomi Gann (second right) with fellow campaigners from ACORN Brighton

Naomi Gann (second right) with fellow campaigners from ACORN Brighton

“We want to make sure letting agents know that we are holding them accountable.

The Tenant Fees Act, which bans landlords and agents from imposing extra charges on tenants, including administration fees, is being welcomed by renters and campaigners in Brighton and Hove.

However, critics have claimed landlords will raise rents in order to make up for what they can no longer charge in fees.

Hove renter Charlotte West said: “I think the Tenant Fees Act is very positive. No more ludicrous charges. It may mean longer term tenancies, with potentially fewer available places to rent, but with much more reasonable costs and stability overall.”

Ms West said she had to pay a £150 ‘check-out fee’ before she moved into her current flat, as well as a deposit and administration fees.

She said: “We disputed this with the agency, stating that the check-out fee should be paid when we eventually moved out, if at all, but were advised that if we didn't pay the charge then we couldn't move in.”

Under the new rules, aside from rent, utilities and a refundable deposit, landlords and agents will only be able to charge for changes to a tenancy, as requested by the tenant, and for any defaults made, such as late payments or lost keys.

Tenants will also see their security deposits capped at five weeks’ rent under the new legislation.

The Act was sponsored by James Brokenshire, secretary of state for housing, communities and local government.

Speaking earlier this year, Mr Brokenshire said the new law would help renters keep more of their hard-earned cash.

“Tenants across the country should not be stung by unexpected costs from agents or landlords,” he said.

“This Act not only delivers on our promise to ban letting fees, but also sets out how and when landlords can charge tenants fees.”

However, some believe cutting down on charges will fail to save renters money in the long-term.

Research commissioned by the Association of Residential Letting Agents (ARLA) predicts a full ban on fees will see tenants pay an increased rent of £103 per year.

Naomi Gann, a member of ACORN Brighton, the UK Community and Renters Union, said it is anticipating rent rises.

“We aim to equip communities to challenge rent increases accordingly, perhaps making this the focus of a union-wide campaign,” she said.

“We also expect that although many agencies will lose out as a result of this legislation, they will probably turn to other forms of income from landlords, for example, by offering management services.

"Overall, the turnover of the major lettings agents in Brighton is still going to be huge.”

Chief executive of the National Landlords Association, Richard Lambert, said while landlords who self-manage will be covering many increases in their outgoings, letting agents are looking at ways to limit what they do on behalf of tenants now costs cannot be directly recovered.

He said: “Tenants are at risk of losing out on the chance to find a home because letting agents are now doing everything they can to minimise workloads to cut costs.

“However, they must realise that penalising outgoing tenants by refusing to provide references will ultimately cost them more than just the price of a reference, as landlords opt to do without agents altogether.”

Ms Gann said further legislation is needed to protect tenants, and supports rent caps that could be set according to the average income.

She said: “We believe rent control is the only way to make rented accommodation affordable for working-class tenants in the long term. We would also endorse a heavy tax on properties left empty.”

Letting agents in Brighton and Hove were approached for comment, but all were unavailable.