A claim by Housing Minister Phil Twyford that letting fees were unfair and had no economic rationale shows naivete unbefitting of a Minister, Tenancies War spokesman Mike Butler said today.

Mr Twyford made the claim in first reading of the Government's Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. The select committee recommended on Thursday that the bill should become law on December 12.

The amendment will prevent charging the equivalent of one week's rent in letting fees by property managers when they take on a new tenant.

“Far from having ‘no economic rationale’, a letting fee covers the costs incurred letting a tenancy, and for Mr Twyford’s benefit, here is exactly what a re-let costs, Mr Butler said.

“A recent re-let of a $225 per week flat included $102 to Trade Me for the advert and five hours of work responding to 15 inquiries, conducting a viewing, checking references, signing up the new tenant, thanking all applicants, as well as doing the paperwork and lodging the bond”, Mr Butler said.

“If a property manager was paid $22 an hour, the total cost of that re-let was $212, which is pretty much equivalent to a week’s rent”, he said.

“Re-letting takes time and money and if done by a property manager, the manager must be paid”, Mr Butler said.

“The only source of money in a rental is rent, which is paid by the tenant”, he said.

“It looks like Mr Twyford has focussed solely on the benefit to the tenant and political benefit for his government and ignored the cost to the property manager who ultimately is paid for out of rent”, Mr Butler said.

“The amendment is yet another onslaught on the 10-year war on owners of rental property by successive governments which should stop”, Mr Butler said.

The current shortage of affordable rental property shows renters face much the same problem as home buyers, he said.

“The Minister should be providing incentives to increase the supply of rental property instead of trying to shift associated costs on to owners”, Mr Butler said.

The group Stop the War on Tenancies aims to empower both owners and tenants in the face of ongoing Government ineptitude with housing.

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