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The next government should assess the impact on the private rented sector before making any decision to ban, or rule out a ban, on letting agents' fees in England, according to an influential committee of MPs.

The Communities and Local Government committee, in a report concluding its work in this parliament, says the evidence from the existing ban in Scotland is not strong enough to reach a view on the impact of a possible ban in England.

Evidence to the committee from bodies in Scotland appeared to be divided on whether any change in rent levels could be directly linked to the ban, the committee says.

Its final report says the next government should ensure it bases its policy on any possible ban on evidence of its net impact on tenants' costs and the private rented market.

"Last week the government announced it had considered but ruled out a ban on fees, as this will simply increase rents for tenants. Labour Party policy is to introduce a ban in England. Neither position is underpinned with convincing evidence according to Clive Betts MP, chair of the Communities and Local Government committee.

He says the jury's still out on the question of whether the Scottish fees ban had led directly to higher rents. None of the evidence from Scotland attempted to calculate the net effect on housing payments for tenants over the whole life of a tenancy. Nor did it look at the wider operation of the private rented marketfor example, whether a ban leads to any change in the use of agents; in the costs they charge to landlords; or in the length of tenancies offered" says Betts.

"Even if a ban is shown beyond doubt to lead to higher rents, it should not be ruled out. It may enable people to spread the costs of renting more comfortably across the duration of their tenancy he says.

But the impact on rents is just one factor to consider. A decision whether or not to recommend a ban on fees should depend not only on its impact on rent, but on benefits in terms of consumer confidence and market transparency. The next government's policy should be evidence-based and look at all three."

Comments

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    I am bloody sick of politicians (particularly Labour) trying to interfere in this sector that we work in. Totally sick of it. Nothing more than a vote-winning exercise as they know that some 9 million voters rent!

    • 25 March 2015 16:37 PM
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    Rents in Scotland have spiked particularly in Edinburgh and Glasgow where most of the largest letting agents are located (Aberdeen was going up anyway due to oil revenues) and the cause of this spike has without doubt been the ban on letting agent fees.

    This ban put more money in tenants pockets and this extra money has found it's way into higher rents as tenants compete with each other to secure the best rental properties using this extra money.

    The most important thing for tenants is the amount of rent they pay and if they realised that what political meddling by the Labour party is going to lead to higher rents then I doubt they would vote for them.

    • 25 March 2015 13:33 PM
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    This debate keeps raising its ugly head and all I can say is why don't they look at also banning Solicitors fees for buying or selling a property or Surveyors fees for home buyers reports. My point is Letting Agents are in the service industry and we don't run on fresh air. Therefore I believe a total ban is only going to shift the costs to the Landlord, who will want to get the increase costs back my increasing the rents, this is FACT. A Landlord rents a property to make money not to fill the gap the government has left in the lack of any structured plan to build affordable homes. Therefore this is only going to make Landlords think twice about buying the property to let in the first place, and creating a bigger housing crisis. I think a cap on fees is fairer, as I see it 300 to 400 per person which some agents charge is excessive and needs to be capped at say 250 per property. This will make a fairer market, give tenants a better choice and makes a level playing field for Agents and a clearer costing structure for tenant. 250 fees, 1 months rent in advance, 6 weeks deposit on everything.

    • 25 March 2015 10:09 AM
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