I would endorse my friend Gareth Bennett’s comments on the difficulties created for tenants by letting fees and charges. The issue of tenancy and letting agent fees is not confined to fees for credit checks and referencing before or at the start of the tenancy, though. There are frequently schedules of pre-agreed fixed costs for breakages, repairs et cetera, and other charges imposed during the tenancy, which provide unscrupulous letting agents—and, for that matter, landlords—with the opportunity to exploit and overcharge tenants.

Welsh Tenants, an organisation that acts as a voice for tenants in Wales, provides an example of a letting agent’s schedule of fees and charges on its website. It contains some, shall we say, interesting charges such as: change of utilities—£25; replacement of tenant—25 per cent of the monthly rent; and contract renewals, as mentioned by Gareth Bennett—£50. Quite what these charges actually cover in terms of work or services provided by the letting agent or how they’re justified by the agency itself is questionable. Perhaps the most illustrative of the fees in the example provided by Welsh Tenants is a £25 fee for the return of overpaid rent. So, if the tenant overpays rent, they are charged £25 for the privilege of having their money given back to them. It seems very odd to me. This example schedule probably represents one of the worst schedules of fees and charges imposed by letting agents, at least I hope so, and I’m sure there are many agents who aren’t as keen to levy charges as in that schedule.

However, the fact that letting agencies can impose such charges and get away with it says a lot about the state of the private rented sector and the dire need to address additional costs to tenants that hamper or prevent their moving to more suitable accommodation. It has been argued, particularly by trade organisations representing letting agents and letting agents themselves, that rents will rise if these letting fees are banned. That doesn’t appear to be borne out by what is happening in Scotland. I would refer Members to Shelter’s report, ‘Ending Letting Fees’, in 2013, which concluded that landlords in Scotland, after the ban was enforced there, were no more likely to increase rents than those elsewhere in the UK.

Even if banning these fees leads to an increase in rents, I would suggest that, firstly, at least the tenant will end up paying the fees in a more manageable way. The fees will be divided over months as opposed to having to pay hundreds of pounds upfront in addition to the bond and the rent. Secondly, landlords are in a better position to negotiate sensible fees and charges with letting agents than their tenants are, which will keep down increases in rents in the first place.

An indication of how lucrative these fees and charges are for letting agents can be found in the way the share prices of the letting agent Foxtons crashed in the hours following the announcement of a ban on fees in England. It suggests that, quite apart from being legitimate costs that are merely being passed on to tenants, these fees and charges are a source of profit for letting agents. Looking at some of the fees and charges in the schedule of fees and charges I referred to earlier, there is a good percentage of profit to be creamed off those fixed costs for an unscrupulous letting agent. For instance, a fixed charge of £400 for a washing machine that may only cost the landlord or letting agent £250 to replace would see a fair bit of profit.

Rent Smart is likely to place more private rental properties in the hands of letting agents, so the proportion of tenants in Wales affected by these fees and charges is not going to reduce any time soon. Close scrutiny of the operation of letting agents in Wales will therefore be necessary. I have no objection to commercial enterprises making as much profit as they like out of people who have sufficient bargaining power to protect themselves from being overcharged and exploited. However, that isn’t the position that the majority of tenants find themselves in. Most tenants have only two options: pay the charges and stand a chance of getting the home they want, or refuse to pay and stay where they are—if they have already a place to live, that is. The only assistance for tenants in Wales is to be found in this Chamber, and I would urge Members to support the motion. Thank you.