Autumn statement: Letting fees are awful, and Philip Hammond is right to ban them

Chancellor Philip Hammond enjoys a private joke somewhere in the Autumn Statement. Image: Getty.

A tragedy, in one graph:

Isn’t that awful? Isn’t that the saddest thing you’ve ever seen? A universally adored brand like Foxtons, losing a tenth of its value in an hour off the back of one bit of bad news? It couldn’t happen to a nicer firm. Perhaps it’s time for the inaugural CityMetric Christmas appeal.

Or we could not do that, on the grounds that banning letting agents fees is a thoroughly good thing, and estate agents are awful.

The move, which chancellor Philip Hammond is announcing in today’s Autumn Statement, will bar lettings agents in England and Wales from demanding tenants pay whatever fees they happen to feel like. (Those in Scotland are already barred from doing so.)

Lettings agents do have costs, of course: reference checks, credit checks, repairing the deliberate damage passers-by do to those minis in examples of what are basically hate crimes. In future, though, they’ll have to recoup them through landlords, rather than tenants.

The whiny, kneejerk, “pro-business” critique of this policy runs as follows. Any attempt to interfere in the operation of the free market will necessarily harm the weakest participants in that market. If letting agents pass their costs onto landlords, landlords will in turn pass them onto tenants. Ergo, the real victims of any attempt to stop lettings agents from torturing tenants any way they happen to feel like it will be tenants themselves.

This critique is, of course, a steaming pile of horseshit, spread about by the sort of people who have no shame about publicly announcing that they’ve not thought very hard about this and probably aren’t actually that clever. For one thing it’s obviously ridiculous. They’re banning parasitical middle men from demanding hundreds of pounds with menaces from renters whenever they have to do some photocopying – and you think that will actually harm renters? Are you high?


But no, let’s be fair to them and destroy their argument using actual logic. Yes, lettings agents do have costs. But there is no evidence that the fees they charge reflect those costs. Occasional CityMetric contributor Alex Parsons put together a report on this, available on the website lettingfees.co.uk. He found that the cost of new tenancy agreements varied from £48 to £450.

Administrative costs clearly don’t vary by a factor of 10: some of those letting agents are charging inflated fees, not because they have to, but because they can. By the time the fee is due, most tenants will have committed to their new home: the agents have them over a barrel. They’re price-gouging, and they should stop.

But there are legitimate costs, of course. Won’t these be passed onto tenants in higher rents? Very possibly – because, while the availability of property won’t change, the availability of money to pay for it will.

Even this is no bad thing, though, since at least they will be passed on consistently. At the moment it’s impossible for tenants to compare the real price of a new home, because are not shown in the advertised rent. Banning letting fees will introduce a much needed measure of transparency to the market.

There are other benefits to a ban. The added costs are likely to be more managable if paid as part of the rent, rather than in a single, upfront lump. It also means an end to unpredictable extra fees, when individual tenants leave houseshares or contracts otherwise need amending.

But if you’re still not convinced, there’s one more way you can tell that the real victims of this policy will be estate agents, rather than tenants. It’s this:

There is a reason that has happened: investors think this policy means that less money will now be going to Foxtons.

It’s a tragedy. A real tragedy, I tell you.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge.

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Tackling toxic air in our cities is also a matter of social justice

Oh, lovely. Image: Getty.

Clean Air Zones are often dismissed by critics as socially unfair. The thinking goes that charging older and more polluting private cars will disproportionately impact lower income households who cannot afford expensive cleaner alternatives such as electric vehicles.

But this argument doesn’t consider who is most affected by polluted air. When comparing the latest deprivation data to nitrogen dioxide background concentration data, the relationship is clear: the most polluted areas are also disproportionately poorer.

In UK cities, 16 per cent of people living in the most polluted areas also live in one of the top 10 per cent most deprived neighbourhoods, against 2 per cent who live in the least deprived areas.

The graph below shows the average background concentration of NO2 compared against neighbourhoods ranked by deprivation. For all English cities in aggregate, pollution levels rise as neighbourhoods become more deprived (although interestingly this pattern doesn’t hold for more rural areas).

Average NO2 concentration and deprivation levels. Source: IMD, MHCLG (2019); background mapping for local authorities, Defra (2019).

The graph also shows the cities in which the gap in pollution concentration between the most and the least deprived areas is the highest, which includes some of the UK’s largest urban areas.  In Sheffield, Leeds and Birmingham, there is a respective 46, 42 and 33 per cent difference in NO2 concentration between the poorest and the wealthiest areas – almost double the national urban average gap, at around 26 per cent.

One possible explanation for these inequalities in exposure to toxic air is that low-income people are more likely to live near busy roads. Our data on roadside pollution suggests that, in London, 50 per cent of roads located in the most deprived areas are above legal limits, against 4 per cent in the least deprived. In a number of large cities (Birmingham, Manchester, Sheffield), none of the roads located in the least deprived areas are estimated to be breaching legal limits.

This has a knock-on impact on health. Poor quality air is known to cause health issues such as cardiovascular disease, lung cancer and asthma. Given the particularly poor quality of air in deprived areas, this is likely to contribute to the gap in health and life expectancy inequalities as well as economic ones between neighbourhoods.


The financial impact of policies such as clean air zones on poorer people is a valid concern. But it is not a justifiable reason for inaction. Mitigating policies such as scrappage schemes, which have been put in place in London, can deal with the former concern while still targeting an issue that disproportionately affects the poor.

As the Centre for Cities’ Cities Outlook report showed, people are dying across the country as a result of the air that they breathe. Clean air zones are one of a number of policies that cities can use to help reduce this, with benefits for their poorer residents in particular.

Valentine Quinio is a researcher at the Centre for Cities, on whose blog this post first appeared.