Help Labour give people protection from predators in our property market

Everyone has horror stories about buying, selling or renting a house. All too often the villain is the agent in the middle. Many estate and letting agents treat their clients fairly, others are exploiting the pressure caused by a shortage of housing to charge extortionate fees. Today Labour will seek to tackle these practices and the impact they have on the affordability of housing. You can help by asking Members of the House of Lords to back Amendment 44D to the Consumer Rights Bill to give tenants, home owners and house sellers protection from predators in our property market.

As Emma Reynolds has so powerfully argued, the provision of housing is key to Labour’s determination to provide opportunity for all. Our country is in the biggest housing crisis of a generation, with the Government presiding over the lowest level of house building since the 1920s. Property prices and rents are not separate but interconnected. As prices go up, landlords seek to maximise their income whether through selling or increasing the rent they charge. The average home now costs eight times the average wage. Rightmove recently predicted house prices would rise by 30% in the next five years, to an average of £318,000 in England and Wales and nearly £715,000 in London. Many tenants face little prospect of being able to buy their own homes, with estimates it can take over 20 years for the average family to save for a deposit. As a result they find themselves stuck in the private rented sector.

Amendment 44D addresses the impact on consumers of the conflicts of interest that can arise under the current legislation covering the sale or rental of a home. In estate agency a new form of contract is becoming more and more popular-‘sale by informal tender’ contracts. These involve using sealed bids to make offers on properties.  Increasingly, agents are then charging the successful bidder an ‘introductory’ fee – in some cases of 2-2.5% of the property price + VAT.

For many buyers these fees run into several thousands pounds- money which the owner of the property never sees. The sellers are also charged a fee to market their property, meaning they are paying for the privilege of being ripped off. It is a practice that leaves both sellers and buyers shortchanged. Buyers lower their offers to accommodate the cost of paying such a fee meaning the seller will receive less for their asset. It’s a deal that reflects how unfair it is for a middleman to receive money from two parties to the same sale, as it is not clear in whose interests they operate except their own.

Such costly conflicts of interest don’t just occur in the sale of property. Tenants and landlords both pay their letting agent for arranging their tenancy contracts. On average tenants are forced to pay £355 to their lettings agents every time they move – while Shelter found some tenants being charged as much as £700 in total.  Little wonder 54% of people surveyed said they faced financial difficulties covering such fees.

Labour’s Amendment 44D to the Consumer Rights Bill would end these fees for both tenants and homebuyers by clarifying that an agent could only act for one party in a sale. Despite the evidence of the problems with our housing market the Government has so far opposed these measures. You can help us make the argument for change by contacting a Member of the House of Lords to ask them to vote for this Amendment. Or you can even tweet them to ask them to vote #amd44d and if you want a suggested text to use to contact them you can find that here.

Please help Labour make the case for Amendment 44D. Its time we put roofs over the heads of tenants and homeowners, not rip off fees in the pockets of agents.