Welsh Government drafts bill to end letting fees in Wales

In a move that will concern letting agents in the principality, a new Welsh Government Bill banning fees charged in the private rented sector was announced by Housing and Regeneration Minister Rebecca Evans yesterday.
The Minister explained that the Renting Homes (Fees etc.) (Wales) Bill will:
  • ensure tenants are no longer charged for an accompanied viewing, receiving an inventory, signing a contract, or renewing a tenancy
  • permit letting agents and landlords to only charge fees relating to rent, security deposits, holding deposits, or when a tenant breaches a contract
  • provide a regulation-making power to limit the level of security deposits
  • cap holding deposits to reserve a property before the signing of a rental contract to the equivalent of a week’s rent and create provisions to ensure their prompt repayment
  • create a clear, simple and robust enforcement regime for when offences occur.

The Minister also announced a new enforcement regime for the bill, which would see fixed penalty notices being issued against anyone requiring a prohibited payment.  If penalties remain unpaid, the bill will give Local Housing Authorities the power to prosecute offences through the Magistrates Court. Convictions for an offence could result in an unlimited fine, and will be taken into account by Rent Smart Wales when considering whether to grant or renew a licence.

Rebecca Evans said:

“In recent years we have seen a significant increase in the number of people renting in Wales. The private rented sector now accounts for 15% of all housing.

“This Bill builds on the work we have already done here in Wales through the Housing and Renting Homes Acts to ensure that those wishing to rent in the private sector can expect high standards, fair treatment and transparency.

“Fees charged by letting agents often present a significant barrier to many tenants, especially those on lower incomes.

“The Bill will mean that tenants no longer face significant upfront fees when they start renting. In most instances they will only need to pay their monthly rent and a security deposit.

“No longer will tenants be charged for an accompanied viewing, receiving an inventory or signing a contract. No longer will they be charged for renewing a tenancy. And no longer will they have to pay check out fees when they move out.

“I want renting to be a positive and widely accessible choice for people and this Bill will ensure that rental costs become more reasonable, affordable and transparent.”

Unsurprisingly, letting agents are unhappy.

Douglas Haig, RLA Director for Wales said:

“Ultimately it will increase the pressure on the most vulnerable in Wales as they will no longer get the assistance from agents to obtain a tenancy.

“It will also shift costs onto long term tenants who have enjoyed incredibly low rent rises way below inflation for many years.

“We had hoped that the Welsh Government would look to work with the sector to create a solution that allowed it to continue to provide the improvements in service and quality that we have seen over the last decade instead of jumping on a Westminster Government policy.”

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