3. Statement by the Minister for Housing and Regeneration: The Renting Homes (Fees etc.) (Wales) Bill

Part of the debate – in the Senedd at 3:24 pm on 12 June 2018.

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Photo of Mike Hedges Mike Hedges Labour 3:24, 12 June 2018

I very much welcome the Government's statement today. It always surprises me the number of people—especially younger people—who have ended up moving into the private rented market who, one generation, two generations or three generations ago, would quite naturally have moved into house purchase. I think that's a change in society that is not necessarily for the better.

Like many colleagues here, I have been calling for the ending of letting fees for several years. There are not many things that could unite Gareth Bennett, Bethan Sayed, Jenny Rathbone and me, but this is one of them. I think that that really does show the breadth of opposition to letting agent fees within this Assembly. They are unfair, unjust and paid by those often least able to afford the cost. I fully support the proposal to end letting agent fees and make it an offence to charge them. 

I’m very pleased that the Government have given up what I considered their ludicrous, economically illiterate objection, voiced last year, that ending letting fees would increase rents and it has now stopped being put forward. Of course it won’t increase them. Yes, there have been increases in Scotland, as David Melding said, but I think that Bethan Sayed summed it up quite well: there have been increases in London, in England, and in Wales as well. House rents go up every year. It’s nothing to do with whether you have letting fees or not letting fees; they go up because of the shortage of housing that exists. And that is where the problem is: that there is a shortage of housing.

But if people really believe that letting agent fees are the solution to decreased rents, why don’t they support that when you’re buying a house, you pay the estate agent’s fees? That’ll move the prices of houses down, wouldn’t it? If that logic follows, then, obviously, the estate agent’s fees should be paid by the buyer not the seller. But, no, people aren’t going to suggest that, because the people who are buying houses would not buy. People who are selling would be unable to sell. Unfortunately, in the private rented sector, people have to pay, otherwise they end up homeless.

So, I really welcome the provision for enforcement arrangements via local authorities and the fixed-penalty fine. I have one question: has the Government considered a fine escalator for those who continually breach the law? Because one of the things that I’m afraid of is that some people will see this as a price worth paying. It’ll happen only occasionally. It’s a bit like those people who park where they shouldn’t and accept a parking fine as part of the cost of parking where they shouldn’t. People do break lots of laws when they don’t get caught very often and they don’t get fined very much, and when you balance out the cost, it may well be economically advantageous to do it. So, can we have an escalator on there? So, it may well be one price for the first time they’re caught, but if we double it the second and then double it the third, a bit like they do with people who fly-tip, and they get a fine, but if they keep on going back, they keep on getting a fine escalator, and whereas the first fine may not be very much, by the time they get to the third or fourth, they realise that fly-tipping is exceptionally expensive. So, can we have an escalator?