Labour will tonight lead a debate and vote on amendments tabled to the Consumer Rights Bill in the House of Lords to protect consumers in the housing market.

This is part of a long-running campaign by Labour to get a fairer deal for private renters, and consumers when buying or selling a home. There will be votes on amendments related to fees and client money protection and a debate on retaliatory eviction.

There is clear evidence that letting agents and estate agents are exploiting the pressures of England and Wales’s frantic housing market to charge rip off fees to consumers. Labour wants to end the ability of agents to act for two parties in a deal at the same time, cutting out rip-off bills and helping to relieve this pressure on the cost of renting, owning or selling a home.

The amendments seek to:

• Ban letting agent fees charged to tenants.
• End the practice of double charging where an estate agent demands fees from both buyers and sellers of the same property.
• Introduce client money protection so tenants and landlords money will be protected if the letting agent goes bust or misappropriates their funds.
• Curb retaliatory eviction where private tenants are evicted for complaining about poor standards in their property.

Emma Reynolds MP, Labour’s Shadow Housing Minister, said:

“Too often consumers are being ripped off because they face sky-high fees or agents are failing to protect their money.

“Labour’s measures will ban letting agent fees on tenants, provide protection for their money if an agent goes bust and end double charging on home buyers.

“We also want to see an end to retaliatory eviction - it’s wrong that tenants are kicked-out of their home for complaining about poor standards in their home.”

Stella Creasy MP, Labour’s Shadow Consumer Affairs Minister, said:

“Everyone has heard horror stories about buying or renting. All too often the common cause was a middle man, either letting or estate agents. Labour’s amendment will stop them being able to double charge tenants, landlords, sellers or buyers and improve consumer protection.

“It’s time the government stopped letting middlemen get away with these rip-off charges that can run into several thousands of pounds.”

Ban letting agents’ fees for tenants:
Tenants are hit by huge upfront costs through unfair letting agent fees. A survey of letting agents found that 94 per cent imposed additional charges on tenants on top of the deposit and rent in advance. Fees are extremely variable, but on average tenants are forced to pay £355 to their lettings agents every time they move house with some paying as much as £500. These costs are putting addition pressure on renters with 54 per cent of people surveyed saying they faced financial difficulties covering fees.

Under Labour’s plans letting agents would be banned from charging fees which can reach up to £500 to tenants. This will save people entering into a new tenancy an average of £350.

Double Charging:
A new form of contract is being used by estate agents to take advantage of the high levels of demand for properties. These ‘sale by informal tender’ contracts involve using sealed bids to make offers on properties. Increasingly, estate agents are then charging the successful bidder an ‘introductory’ fee – in some cases of 2-2.5 per cent of the property fee + VAT - as a ‘finder’s fee’ to the agent. Sellers are also charged a fee to market their property in this way. This practice leaves both sellers and buyers short-changed.

Under Labour’s plans we will prohibit estate agents from acting for both the buyer and the seller of a property in the same transaction by making it an offence under the Unfair Trading Regulations. Just like lawyers shouldn’t act for both parties in a court case, so agents can’t represent both parties fairly in a sale.

Client Money Protection:
Letting agents handle large sums of money on behalf of tenants and landlords, but unlike for estate agents, there is no regulation over how the money is held. If a letting agent goes bust or misappropriates any funds then tenants and landlords have no guarantee they can get their money back.

Under Labour’s plans, Client Money Protection will be mandatory for all letting and management agents. These schemes will provide compensation to landlords, tenants and other clients should an agent misappropriate their rent, deposit or other client funds.

Retaliatory Eviction:
There is currently no protection from eviction for renters who report poor conditions to their landlord or local authority. As a result, according to Shelter over 200,000 renters have been evicted or served notice in the past year because they complained to their local council or their landlord about a problem in their home.

Labour’s amendment seeks to raise the issue of retaliatory eviction and requires the Secretary of State of Communities and Local Government to issue guidance on how the practice can be brought to an end.