Sadiq Khan criticises Theresa May for ‘watering down’ proposals to combat high fees and deposits for renters

Sadiq Khan, the London mayor, has criticised Theresa May for “watering down” proposals to combat “rip off” tenancy fees and deposits for renters.

In a joint letter to the prime minister, alongside the organisations Crisis, Generation Rent and Citizens UK, Mr Khan claims a key piece of legislation making its way through parliament – designed to ban agents’ fees – contains an alarming loophole.

He says letting agents could still end up “charging excessive” and “spurious” fees spread throughout a tenancy, rather than charged upfront as is the case at present. It is suggested that such fees typically cost £223.

Mr Khan’s remarks come after the Tenant Fees Bill was introduced into parliament in May this year after being announced almost two years ago at Philip Hammond’s first Autumn Budget statement.

“Fees and deposits mean renters need to find nearly £2,000 on average every time they move home, rising to an eye-watering £3,700 in London,” the letter states.

“Most renters do not have that kind of money to hand, and so the chancellor’s announcement in the Autumn Budget 2016 that deposits would be capped and fees banned was a significant step forward.

“But we are now concerned that, despite its extensive pre-legislative scrutiny, several parts of the Bill look increasingly like a missed opportunity to truly help renters.”

It adds that despite calls for the government to cap deposits at no more than three weeks’ rent and a previous vow from ministers to support a cap of four weeks, “it has backtracked and now proposes six weeks”.

“This Bill will enable landlords to take far greater deposits than they are ever likely to need – and it could worsen affordability for those currently paying lower deposits by making six weeks the norm,” the letter claims.

It continues: “What’s more, the Bill contains loopholes that mean letting agents could still end up charging tenants excessive and spurious fees, albeit spread throughout a tenancy rather than charged up-front.

“The Bill opens the door to an entirely new culture of exploitation by formalising agents’ ability to charge renters for basic services – such as chasing late rent payments or responding to emergency call-outs – that should be covered by the management fee landlords have already paid.”

Mr Khan added: “Rising rents, ongoing insecurity, and in too many cases poor quality housing make the 2.4 million private renters in London amongst those worst affected by the housing crisis.

“By backtracking on proposals and watering down the strength of this Bill, ministers are in danger of opening the door to an entirely new culture of exploitation, with the legislation left unfit for purpose and simply a missed opportunity to truly help renters.”

A government spokesperson told The Independent: “We want to help the millions of renters in this country by making the rental market fairer and more transparent.

“Through banning unfair letting fees and capping tenancy deposits, the Tenant Fees Bill will save tenants around £240m a year.

“The Bill will protect tenants from significant fees at the outset, renewal and termination of a tenancy and also make landlords join a scheme so tenants can recover unlawfully charged fees.”