Residential houses on January 2, 2012 in Bath. Photograph: Getty Images.
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Why a ban on letting agent fees is essential

In the many parts of the country where demand for housing exceeds supply, tenants are being exploited.

Today the House of Commons will vote on whether to ban letting agency fees to tenants in England, a measure already implemented in Scotland and progressing in Wales. This debate will be on an amendment Labour has tabled to the Consumer Rights Bill.

We’re not convinced this is a left or right-wing issue. There's a system that doesn't work and it needs fixing. This is a managerial issue and the system that isn't working is the lettings market. There are decent agents, and we hear from them all the time. But in the many parts of the country where demand for housing exceeds supply, usually because of the availability of jobs, agent behaviour degrades.

ComRes poll we commissioned this year showed that 30 per cent of tenants have experienced "surprise" fees in the course of a tenancy, something supposedly outlawed by the Advertising Standards Agency. And 10 per cent report they have been stung more than once.

As a private market, you expect the price of a product to be the result of supply and demand. But the headline cost of rent doesn't include the increasingly complex range of fees invented by agents to charge tenants, usually after they have gamed a tenant into commitment. One such game is an extensive and unnecessary "registration" process prior to viewing any homes to deter a renter from registering with multiple agencies. It has become the norm for agencies to engage in practices that are banned in similar fields such as recruitment consultancy or financial advice. This includes advertising properties that are not available and levying charges on someone who is not your customer.

Our position is simple. The landlord is the agent's customer and should be offered a service for a fee. This becomes a cost of business when the landlord sets the rent, giving the renter a transparent view of the true costs before they make a commitment. Normal market behaviour of landlords would create a downward pressure on agent costs and an upward pressure on quality of service. High quality agents would win business from poor quality operators, who could no longer undercut them by hiking up tenant fees.

At the moment agents push down fees to landlords but are free to charge multiple times this to the tenant, often without the landlord's knowledge but certainly without any landlord pressure to reduce those tenant fees. Furthermore there is anecdotal evidence that some agents encourage "churn" in tenancies because of the value of tenant fees. We're simply asking for a market where landlords buy an agency service knowing the true cost and that tenants can rent a home knowing the true cost.

Due to insecurity of tenure, and of course tenant choice, one third of renters move home each year. That's over three million people, meaning about a million people a year are being stung by hidden agent fees totalling hundreds of millions of pounds. 

There’s a guy in Hertfordshire who has insisted I can't identify him because he believes he'll get evicted and lose his deposit if I do so. Because he's on a low income the letting agent insisted he pay six months’ rent in advance and renew his tenancy every three months thereafter, each time paying three months’ rent in advance and a £100 fee. The agent refused to let him ask the landlord for a normal monthly rolling tenancy agreement and eventually lowered the “renewal” fee to £50 for one instance. He has now been living in this situation for three years.

In telling you this I'm trying to show how the most vulnerable renters are most exposed to the crass profiteering of the worst agents. In this context it's hard to conceive of a Consumer Rights Bill without a ban on agency fees.

Alex Hilton is director of Generation Rent

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Brexit is teaching the UK that it needs immigrants

Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past.

Why did the UK vote to leave the EU? For conservatives, Brexit was about regaining parliamentary sovereignty. For socialists it was about escaping the single market. For still more it was a chance to punish David Cameron and George Osborne. But supreme among the causes was the desire to reduce immigration.

For years, as the government repeatedly missed its target to limit net migration to "tens of thousands", the EU provided a convenient scapegoat. The free movement of people allegedly made this ambition unachievable (even as non-European migration oustripped that from the continent). When Cameron, the author of the target, was later forced to argue that the price of leaving the EU was nevertheless too great, voters were unsurprisingly unconvinced.

But though the Leave campaign vowed to gain "control" of immigration, it was careful never to set a formal target. As many of its senior figures knew, reducing net migration to "tens of thousands" a year would come at an economic price (immigrants make a net fiscal contribution of £7bn a year). An OBR study found that with zero net migration, public sector debt would rise to 145 per cent of GDP by 2062-63, while with high net migration it would fall to 73 per cent. For the UK, with its poor productivity and sub-par infrastructure, immigration has long been an economic boon. 

When Theresa May became Prime Minister, some cabinet members hoped that she would abolish the net migration target in a "Nixon goes to China" moment. But rather than retreating, the former Home Secretary doubled down. She regards the target as essential on both political and policy grounds (and has rejected pleas to exempt foreign students). But though the same goal endures, Brexit is forcing ministers to reveal a rarely spoken truth: Britain needs immigrants.

Those who boasted during the referendum of their desire to reduce the number of newcomers have been forced to qualify their remarks. On last night's Question Time, Brexit secretary David Davis conceded that immigration woud not invariably fall following Brexit. "I cannot imagine that the policy will be anything other than that which is in the national interest, which means that from time to time we’ll need more, from time to time we’ll need less migrants."

Though Davis insisted that the government would eventually meet its "tens of thousands" target (while sounding rather unconvinced), he added: "The simple truth is that we have to manage this problem. You’ve got industry dependent on migrants. You’ve got social welfare, the national health service. You have to make sure they continue to work."

As my colleague Julia Rampen has charted, Davis's colleagues have inserted similar caveats. Andrea Leadsom, the Environment Secretary, who warned during the referendum that EU immigration could “overwhelm” Britain, has told farmers that she recognises “how important seasonal labour from the EU is to the everyday running of your businesses”. Others, such as the Health Secretary, Jeremy Hunt, the Business Secretary, Greg Clark, and the Communities Secretary, Sajid Javid, have issued similar guarantees to employers. Brexit is fuelling immigration nimbyism: “Fewer migrants, please, but not in my sector.”

The UK’s vote to leave the EU – and May’s decision to pursue a "hard Brexit" – has deprived the government of a convenient alibi for high immigration. Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past. Brexit may have been caused by the supposed costs of immigration but it is becoming an education in its benefits.

George Eaton is political editor of the New Statesman.