Plans to ban letting agent fees paid by tenants were struck down by MPs last week.
The Labour proposals, which would have brought England and Wales in line with Scotland, were defeated by 281 votes to 228 at the first stage of their Parliamentary journey.
MPs were voting on a proposed amendment to the Consumer Rights Bill that would have banned the fees outright when paid by tenants. The government has now said that it will make its own amendments, but it will stop well short of the Labour proposals.
Instead, the government’s plans would see letting agents obliged to display a full tariff of fees on their website and in their offices. Failure to do so could result in a fine.
The government’s proposals were welcomed by the Residential Landlords Association, whose policy director Richard Jones said: “Labour’s plans would have only served to increase tenant rents as many landlords would in all likelihood have passed the extra costs of having to shoulder all charges levied by letting agents onto tenants.
“This week’s announcement will prove good for tenants and landlords alike and we look forward to working constructively to see its full and successful implementation.”
But shadow housing minister Emma Reynolds said that more should be done. “Homebuyers rightly don’t have to pay the estate agent who is working on behalf of the seller of the property. However, in contrast, renters have to pay to get the keys to their rental property. The average upfront fees are £350 but in high demand areas, these fees can be much more expensive.
“Generation rent needs proper protection against being ripped off. A Labour government will ban letting agent fees on tenants.”