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The Secretary of State for Wales Alun Cairns is calling on the Welsh Government to ake measures to protect tenants in Wales from unjust fees and rogue landlords and agents.

Secretary of State for Wales Alun Cairns said:

Getting set up in a private tenancy can be eye-wateringly expensive. Not only must new tenants find thousands of pounds upfront for deposits and rent in advance – they also have to pay fees to letting agents for a range of administrative costs which can often run into the hundreds of pounds.

This has been going on for far too long and, today, the UK Government is taking a stand by giving tenants in England more power to challenge extortionate fees and poor treatment.

Wales must not get left behind. It is time that the Welsh Government followed the example being set in England and move quickly to protect tenants in Wales from unjust fees and rogue landlords.

Read more about the measures unveiled by the UK Government here

Plans for new measures to help create a fairer property management system that works for everyone have today (18 October 2017) been announced by the Communities Secretary Sajid Javid.

With over 4.2 million leasehold homes in the country and service charges reaching between £2.5 billion and £3.5 billion a year, the Communities Secretary will say the government is determined to fix the problems in the property management industry, drive down costs and protect consumers from the small minority of rogue agents.

The problem isn’t just for leaseholders, but for some of the 4.5 million tenants in the rental sector too – with overcharged costs for repairs and services often passed down to tenants.

Since 2010, government has taken action to require all letting and management agents to belong to a redress scheme, and we have introduced a range of tougher measures to target rogue landlords and agents in the private rented sector.

As part of this new call for evidence, government is seeking views on:

• whether regulatory overhaul of the sector is needed
• measures to protect consumers from unfair costs and overpriced service charges
• ways to place more power in the hands of consumers by giving leaseholders more say over their agent

It will ask if a new independent regulatory body is needed – and if separate bodies should be established, for both leasehold and private rented management, and letting agents.

While the sector is partly self regulated – through professional bodies such as the Association of Residential Managing Agents (ARMA) and ARLA Propertymark (formally Association of Residential Letting Agents) which have a code of conduct, other property agents operate outside of any system and can provide a poor deal for consumers.

Communities Secretary Sajid Javid said:

This is supposed to be the age of the empowered consumer – yet in property management, we’re still living in the past.

Today we are showing our determination to give power back to consumers so they have the service they expect and deserve, as part of my drive to deliver transparency and fairness for the growing number of renters and leaseholders.

Our proposed changes to regulate the industry will give landlords, renters and leaseholders the confidence they need to know that their agents must comply with the rules.

Research by consumer group Which? shows that unfair practices can lead to as much as £700 million of unnecessary service charges being paid each year, and others such as the All Party Parliamentary Group on leaseholds believe the total could be as much as £1.4 billion.

The government will consider changing the law so that all letting and management agents, across both the private rented and leasehold sectors, must be qualified and regulated in order to practice.

Measures to be considered as part of the call for evidence include:

• how consumers can be empowered in the market, including whether leaseholder tenants should have a greater say over the appointment of managing agents
• how transparency can be increased in the system so that tenants and leaseholders know what they are being charged for and why
• ensuring fairness and openness around relations between freeholders and agents
• looking at what qualifications are needed by agents to practice and how regulation can be improved

This piece of work is part of wider government action to bring power back to the tenant and leaseholder.

In summer 2017, government launched a consultation setting out radical proposals to cut out unfair abuses of leasehold to deliver a fairer, more transparent system for homebuyers. Plans include banning new build homes being sold as leasehold as well as restricting ground rents to as low as zero.

Earlier this month the Secretary of State also announced measures to help make sure tenants are more secure in their homes; requiring all letting agents to be regulated; and consulting with the judiciary on the case for a new Housing Court – a specialist court with the aim to save time and money resolving housing disputes.

Government has also confirmed it will legislate to ban letting fees so that tenants aren’t hit by unfair charges.

Further information

Anecdotal evidence of poor management includes:

• a group of leaseholders charged ten times the market rate to have a new fire escape fitted – with the £30,000 contract handed to the freeholder’s brother
• one landlord charged £500 by his agent for repairing a shower door
• a London-based property agent who tried to charge a leaseholder almost £5,000 to transfer ownership of a parking space to other leaseholders

The call for evidence will last for 6 weeks from Wednesday 18 October 2017.

The proposals relate to England only.

Managing agents are a person or company appointed by the owner (or someone operating on their behalf) to manage that property and their role may include for instance repairs and maintenance. Managing agents operate in both the private rented sector and the leasehold sector.

Projects that combat drug and alcohol dependency and support children in care will receive more than £16 million, Minister for Sport and Civil Society Tracey Crouch announced today.

The money is the first round of investment from the £80 million Life Chances Fund and will:

• provide specialist services for children in foster care and residential homes
• help drug and alcohol dependent adults find full-time work, reduce addiction and cut unnecessary A&E admissions.

All ten projects are Social Impact Bonds, meaning money is only transferred when projects meet agreed targets. The investment is in addition to funding from 36 local authorities who will provide a combined £37.6 million to the ten successful projects.

Minister for Sport and Civil Society, Tracey Crouch, said:

“This funding will benefit some of the most vulnerable people in society and provide vital support to help them transform their lives. The UK is a world leader in using social impact bonds to make a positive impact in society and these projects will achieve real results in communities across the country.”

Examples of the projects that will receive funding are:

Family Drug and Alcohol Court (FDAC)

FDAC will receive £6.2 million over seven years to support its work within the family court system to help families whose children are subject to care proceedings due to parental substance misuse and domestic violence in the home. Parents will be supported to address these issues so that children can be safely returned to the home. It is estimated that over 2,400 individuals will benefit from the programme.

Fostering Better Outcomes

Supported by Cheshire West and Chester Council, Fostering Better Outcomes will receive £939,000 to support the delivery of a project which aims to help children and young people transition into stable foster care. It will work with 30 children aged seven to 17 who are in or are at risk of entering residential care, to help improve their emotional well-being.

West London Alliance

The organisation will receive £1,200,000 to deliver placement services to people with drug and alcohol addictions who are out of work, so they can gain and retain competitive paid employment.

The Big Lottery Fund is delivering the Life Chances fund on behalf of DCMS.

ENDS

 NOTES TO EDITORS

The £80m Life Chances Fund was launched in July 2016 with the objective of tackling entrenched social issues and helping those people in society who face the most significant barriers to leading happy and productive lives.

The fund is structured around six key themes: drug and alcohol dependency, children’s services, early years, young people, older people’s services, and healthy lives.

The grantees, the money they will receive and the project they will deliver, are listed below:

1. Family Drug and Alcohol Court: Will receive £6,052,434 to work with the family court system to support families whose children are subject to care proceedings due to parental substance misuse and domestic violence in the home.
2. East Midlands Children’s Services Social Investment Platform: Will receive £3,001,057 for the delivery of new services that support challenging young people aged 10-17 who are either in care or at risk of entering care.
3. Integrated Family Support: Will receive £1,890,000 to fund the work it will carry out with families to reduce child safeguarding concerns associated with drug and alcohol use among parents.
4. West London Alliance: Will receive £1,200,000 to deliver placement services to people with drug and alcohol addictions who are out of work, so they can gain and retain competitive paid employment.
5. Bright Residential for Children: Will receive £1,118,520 to fund the way that residential placements for children and young people in Warwickshire are delivered.
6. Fostering Better Outcomes: Will receive £939,000 to support the delivery of a programme which aims to help children and young people transition into stable, highly supported foster care.
7. Cornwall Frequent Attenders Project: Will receive £779,216 to deliver services aimed at reducing frequent and avoidable A&E attendances by people with drug and alcohol problems.
   8.Plymouth City Council: Will receive £539,140 to reduce the number of children aged five years and under entering care. Over a three year period it will provide support for up to 40 women who are experiencing a cycle of recurrent removal of their children.
8. Edge of Care and Reunification: Will receive £425,000 to support the delivery of multisystemic therapy, an evidence based programme which aims to return looked after children to the family home, or place them in sustainable foster care.
9. Early Intervention Care Prevention: Will receive £422,400 to develop a programme that will aim to reduce the number of adolescents entering or staying in care in Suffolk.