8. 6. UKIP Cymru Debate: Letting Agents Fees

Part of the debate – in the Senedd at 5:55 pm on 7 December 2016.

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Photo of Carl Sargeant Carl Sargeant Labour 5:55, 7 December 2016

Thank you, Presiding Officer. I thank comrades for their contributions. Jenny Rathbone has been a champion of this proposal for many months, and she continues to be so. I’m very grateful for the opportunity to have some conversations with her regarding this very issue.

The Welsh Government has consistently demonstrated its commitment to a fair deal for private sector tenants, most recently introducing the Renting Homes (Wales) Act 2016 and the introduction, indeed, of Rent Smart Wales.

Llywydd, we are cracking down on rogue agents and landlords and are working to raise standards in the sector. This debate is not about who cares about the interests of tenants more. It’s about one particular proposal, the effectiveness of which has yet to be proved. The First Minister has already given his assurance that we are actively considering a ban on letting fees to tenants and this issue, and I’m happy to confirm that today.

Just before I continue, it is worth noting Sian Gwenllian’s contribution today, which perhaps needed some more meat on the bone around the detail there. I’m very keen to acknowledge that Members across all parties are in this space of considering this proposal, but the Member would be wrong to think that the Conservatives in any way supported the renting homes Bill. In fact, they actively sought to derail it. They’ve suddenly seen the light about letting agent fees; actually, they voted against the legislation that we introduced here in this Chamber. The other point of fact that the Member may wish to consider is that I think she suggested that we had shared legal advice with Labour backbenchers. That wasn’t ever said, and is not true either. If the Member didn’t suggest that, I apologise, but from her wording, that is what I took from her contribution. But if that’s the case, then I acknowledge that, too.

In terms of the proposals I believe we all share about some of the practices of letting agents, Rent Smart Wales will improve the way they’re run, their businesses, with sanctions if they fail to do so. Legislation brought in via the Consumer Protection Act 1987 means agents have to publish their fees upfront, but I am also conscious of the Shelter survey that went on, and we have to look at this more carefully in terms of what the legislation says.

The motion refers, quite rightly, to concerns about the impact that agent fees can have on tenants and proposes further legislation. I understand the thinking behind the motion, but there are two fundamental flaws that you must think through before we legislate. Firstly, it appears to suggest we consider the impact and then move directly and very rapidly to that legislation without further consideration. What is needed right now is a very detailed and careful consideration of experience elsewhere—Scotland, for example—and the policy objectives of the legislation solution that has been put forward. Similarly, we need to look very closely at what is being proposed for England and the evidence base that underpins that also.

Secondly, the motion suggests that costs must not be passed on to tenants via rent increases. There is a separate discussion to be had about the desirability of comprehensive rent controls, but this goes way beyond the question of banning agents’ fees to tenants. So, again, it’s a complex point that you raise within the same debate, which I think, actually, may have been better discussed on a separate occasion. But it is something that we are considering as a whole, as the motion suggests. The proposal to prevent agents from increasing their fees to landlords would require a system of Government-determined limits on agents’ fees, and the letting agents are businesses. Together they employ thousands of people in communities throughout Wales, but we must make sure, with legislation, that we control that properly.

For these reasons, I can’t support the motion today. The flaws in the UKIP proposals demonstrate the need for full consideration of the evidence and consultation before we move to legislation. Similarly, I’m unable to support the first of Plaid Cymru’s amendments, which suggests we should have acted without evidence or full consideration. I would be surprised if the Member, and the party, really considered that to be their position. We are always prepared to reflect on what’s in place and take further action where the evidence shows that there is more that can be done. Evidence is now emerging from Scotland, and this is the time to determine what we should do here, in Wales. Our approach is set out in this Government amendment. We need to look very carefully at the evidence presented. Scotland first introduced legislation banning agents’ fees in 1984. They reinforced that in 2012, and whilst the evidence from the Shelter research suggests there has been little impact on rental levels, other anecdotal evidence suggests that rents have gone up, and there are even greater stories of agents who are still charging tenants. We must look through that to see if there’s a solution for us here in Wales. But I’m happy to move our amendment today.