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Renting made ‘fairer’ as letting fees banned

Paloma Kubiak
Written By:
Paloma Kubiak

The government has introduced a bill to ban letting fees across England which should saver renters millions of pounds a year.

The scourge of letting agent fees and high deposits has left many renters with affordability problems as they’re unsure of the true cost of their tenancy.

As such, the government has introduced the Tenant Fees Bill to bring an end to costly and unexpected letting fees, saving tenants around £240m a year.

Tenants will also receive greater assurances that the deposit they pay at the start of the rental term can’t exceed six weeks’ rent.

Housing Secretary, Rt Hon James Brokenshire MP, said: “This government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs.

“That’s why we’re delivering our promise to ban letting fees, alongside other measures to make renting fairer and more transparent.

The Tenant Fees Bill will also stop letting agents from exploiting their position as intermediaries between landlords and tenants, and prevent unfair practices such as double-charging for the same services.

Further, the ministry of housing said the move will also help to increase competition between agents and landlords, which could help drive lower costs and deliver a higher quality of service for tenants.

Other key measures in the Bill, include:

  • capping holding deposits at no more than one week’s rent
  • capping the amount that can be charged for a change to tenancy at £50 unless the landlord shows greater costs were incurred
  • a fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last five years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution
  • requiring Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees
  • prevent landlords from recovering possession of their property until they have repaid any unlawfully charged fees
  • the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.

Alongside rent and deposits, agents and landlords will only be allowed to charge tenants fees associated with:

  • a change or early termination of a tenancy when requested by the tenant
  • utilities, communication services and Council Tax
  • payments arising from a default by the tenant such as replacing lost key

The Bill is expected to be introduced in law next year.