According to a report in the Financial Times, the change would cover 4.3m privately rented households across England, potentially saving tenants average fees worth £337. Scotland has already banned letting agent fees for tenants.

Hammond said: “In the private rental market, letting agents are currently able to charge unregulated fees to tenants. We have seen these fees spiral, often to hundreds of pounds. This is wrong. Landlords appoint letting agents and landlords should meet their fees.”

“So I can announce today that we will ban fees to tenants as soon as possible.”

Letting agents in England have remained unregulated despite repeated calls from the Association of Residential Letting Agents (ARLA) to impose compulsory regulation on the sector.

However, industry commentators appear divided on how the ban would impact how landlords pass on any additional costs to their tenants.

John Eastgate, sales and marketing director of OneSavings Bank, said he expected renters to bear the brunt of likely added costs imposed on landlords.

“Letting fees have inflated beyond reason in certain parts of the country, so scrapping them has all the markings of a good policy. However, renters will inevitably pay for the further cost on landlords through increased rents, so it’s hard not to see the move as two steps forward, one step back for housing policy.”

Bob Young, CEO of Fleet Mortgages, was more optimistic: “Given the likelihood these charges will now have to be paid by the landlord, they will be able to offset letting charges against tax. I’m not completely convinced these measures will result in an increase in rents as typically landlords charge what the market will take and that may not allow an increase,” he said.

“Overall the private rental sector has good landlords, good tenants and good letting agents. Unfortunately it also has poor landlords, poor tenants and poor letting agents and these latter elements need to be dealt with.”