With less than one month to go until the Tenant Fees Bill goes to reporting stage, which could spark massive changes in the private rented sector, Sadiq Khan has labelled the legislation “unfit for purpose” after some proposals were backtracked.

The Tenant Fees Bill, which is still going through Parliament with a third reading due on 5 September, will see all upfront letting and agency fees charged to tenants banned across England, while also potentially capping tenant deposits at no more than six weeks’ rent.

However, London mayor Sadiq Khan has complained that the Bill has been “watered down” and believes it is a “missed opportunity” for ministers to evoke real change in the country’s housing market.

One of Khan’s criticisms of the current Bill is that the government has backtracked on its earlier promise to cap tenancy deposits at four weeks, and the new six-week cap could serve as a target for some agents and landlords to actually charge more to tenants – which would be particularly harmful for those renting in London, where asking rents are now £2,000 a month.

Khan also says that, while upfront fees will be banned, the Bill means the industry is still open to a loophole that could mean agents charge fees which are instead spread throughout the tenancy, meaning tenants are still footing the bill.

New culture of exploitation

“Rising rents, ongoing insecurity, and in too many cases poor quality housing makes the 2.4 million private renters in London amongst those worst-affected by the housing crisis,” said Khan.

“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.”

He added: “This is just one area of housing where ministers are letting people down, both in London and across the country. Social housing residents need a much stronger voice, and yet the promised Green Paper about this is nowhere to be seen. Rough sleeping is at a crisis level, yet the government’s strategy remains unpublished. Ministers need to show they mean what they’ve said by urgently taking action – with increased funding – rather than breaking their promises and hoping no-one notices.”

The mayor would like to see rental deposits capped at three weeks’ rent – which is one of Labour’s promises should it come into power – as well as scrapping “default fees” which could be written into tenancy agreements, increasing illegal fees penalties to £30,000, and allowing tenants to be able to claim back unfair payments with compensation.