I entirely agree. We see it in London as well, where people are having to move: every single time they move a fee is applied, and those fees are extortionate and are anti-consumer, as I shall explain.
The average such fee is about £355, but there are great variations. In my constituency of Walthamstow, in the work we have done on the “home sweet home” campaign, we found some fees as high as £827. We found renters being asked to pay fees for having pets, for having their houses cleaned and for a whole range of other practices, and we can see the consequences. We also know that 94% of letting agencies impose a fee on top of rent in advance and a deposit. There is therefore a huge sum of money for people to find. One constituent had to find £4,000 before he and his family could move into a property.
One in seven of those who use an agency are charged over £500 in agency fees before finding the deposit or rent in advance. Mystery shopping by Shelter found that some renters are routinely being charged £700. Over the past three years, one in four people who have dealt with a letting agency have said they have had to borrow money to pay that fee, which is of relevance to our previous debate. One in six is cutting down on food or heating to meet the cost of that fee, and four in 10 experience money worries as a direct result of that fee. If that fee is being applied every single year because people are moving again and again, we can see how quickly these sums can cause huge problems for consumers.
Some, perhaps those on one side of the coalition, will say what we need to do is make sure there is transparency. Certainly we explored whether people knowing the kind of fees they were facing—if everyone was upfront about the amount of money they were going to charge as a fee for introducing clients to a landlord, for example—could be one way of addressing this. That is a bit like somebody being tied to the train tracks and being told the train timetable, however, because in the current market many tenants have little option but to try to borrow to find that fee and then deal with the financial consequences. While I appreciate that one half of the coalition has now understood that fees are a challenge, the argument that simply knowing how much those fees are is enough in itself to deal with these problems simply does not wash. And nor does capping fees, because it is anti-consumer to have two different organisations paying for the same service. That is what we are talking about here: a form of double-charging. How can both the landlord and the tenant pay for the same service at the same time and the agent act in the interests of both? How can a landlord be confident that they are getting the best tenants if the agent also has the tenant’s interests at heart? How can a tenant be confident that they are getting a decent landlord if the landlord is also being acted for by the agent? This is fundamentally an anti-competitive practice and we think it is therefore time to act. Our new clause would do something very simple: it would clarify that renters could not be charged a fee.
5.15 pm