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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Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle