Letting agent fees for tenants in Wales face ban under new law

Landlords and letting agents could be banned from charging fees to private rental tenants in Wales under plans for a new law.

Offenders could face a £500 fixed penalty, unlimited fines and possibly the loss of their landlord licence.

Housing Minister Rebecca Evans said most tenants should only be asked to pay a month's rent and a security deposit.

The Residential Landlords' Association said it would result in higher rents.

At the moment, tenants can be charged fees for a range of administrative reasons, including credit, reference and immigration checks or for an accompanied viewing.

Letting agents' fees were banned in Scotland in 2012, and AMs from all parties have called on the Welsh Government to follow suit..

The UK government promised a law to ban them in England in the 2017 Queen's Speech.

The Renting Homes (Fees etc.) (Wales) Bill will allow agents and landlords to charge fees only relating to rent, security deposits, holding deposits, or when a tenant breaches a contract.

It will include powers to limit the levels of security and holding deposits.

Ms Evans said the bill would ensure rental costs become "more reasonable, affordable and transparent" in a growing sector which now makes up 15% of all housing.

She said it would build on previous legislation "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," Ms Evans said.

"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."

A licensing system for landlords - Rent Smart Wales - was launched in 2015 in what the Welsh Government said was an attempt to "improve the image" of the private rental sector.

The Welsh Government said convictions for unwarranted fees could be taken into account when decisions were taken on whether to grant or renew a licence.

Welsh Conservative housing spokesman David Melding backed ministers' plan for a new law.

"What we hope is that the Welsh Government are learning from the Scottish ban, and the scrutiny of the Westminster proposal, to ensure that the most efficient system is put in place in Wales," he said.

"The outcome that we need and should be hoping to achieve is a housing sector that is fair and works for everyone."

But Douglas Haig, director for Wales of the Residential Landlords Association, said: "The complete ban on tenancy fees will simply place further pressure on landlords to review increases to the amount that they charge in rent to cover the costs set by letting agents.

"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 and it shifts the cost onto long-term tenants who have enjoyed incredibly low rent rises way below inflation for many years."