Having spent time since the general election deliberating over how best to help first-time buyers, it was nice to see the government finally returning its attention to renters this week with its draft Tenant Fees Bill.
Yet the sad reality is that beyond grabbing the government a few good headlines, the ban on letting fees is unlikely to help anyone, especially renters.
While a very small minority of rogue agents do charge rip-off fees, most of the time they represent a genuine administrative cost that needs to be recovered.
The ban is also likely to discourage some agents from going above and beyond in helping prospective tenants, leaving them unsure of their rights and responsibilities.
Rather than listen to the industry, the government would rather pander to the media and its claims of the rental market being an unregulated ‘Wild West’, which could not be further from the truth. In fact, there are few other markets where the government sees fit to constantly intervene.
What would actually help, however, is mandatory licensing for letting agents, which would squeeze out the more unscrupulous actors and give renters peace of mind.
Perhaps most importantly, the ban will also do little to actually help tenants in dealing with their greatest expense: the rent itself. For years, demand for rented accommodation has been outstripping supply in many cities, pushing up rent levels. This has happened while wages have remained stagnant - a situation that has been worsened by the Brexit-driven spike in inflation.
The obvious solution would be to try and find a way to boost people’s pay, which is easier said than done.
The other option is to encourage more homes for rent, helping to balance demand with supply. But the government continues to go after buy-to-let landlords with new tax changes and regulation in the mistaken belief they crowd out first-time buyers.
Industry pundits might point to build-to-rent as a welcome alternative, but even in more institutionalised rental markets like the US, ‘mom and pop’ landlords continue to provide the mainstay of rented accommodation. And in the UK, the sector is still very much in its infancy.
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