On 1st June this year, the much-talked-about tenant fee ban came into force in England, under the Tenant Fees Act. This means:

  • Landlords and letting agents are not permitted to charge tenants for anything other than:
    • An administration fee when the tenant requests a change or early termination of a tenancy
    • Utilities, communication services and Council Tax bills
    • Payments arising from a default by the tenant, e.g. replacing a lost key.
  • Holding deposits are capped at one week’s rent
  • Tenancy deposits capped at 5 weeks rent or 6 weeks’ if annual rent is £50,000 or above

Fines for breaching the new law are up to £5,000 for a first offence, with an unlimited fine for reoffending within 5 years.

As soon as proposals for a ban were outlined in the Tenant Fees Bill last year, the media and many industry experts started warning that it would result in rents being pushed up. And, even though the Bill only recently became law, those predictions have already started to become intentions.

A recent survey of letting agents by ARLA showed that 70% were looking to increase their costs towards landlords as a result of not being able to pass charges on to tenants. On 15th June, The Guardian reported that one London letting agent has wasted no time in charging landlords directly for credit and other checks, to the tune of £240. And they’ve advised their landlords to recoup this additional cost by raising rents by £20 a month. Only time will tell whether these predictions will become a reality.

That’s all very well in theory, but as experienced agents, we know it is only possible to charge what tenants are willing and able to pay. Unfortunately rents can’t be increased just because costs have risen.

It’s been reported in various publications, including The Mirror, Metro and The Independent: “The tenant fee ban will save UK renters £192 million a year, new analysis [of government data] has found.” And if rents remain unchanged, the average tenant will save approximately £223.

In other parts of the UK:

  • In Scotland, it has been illegal to charge tenants any fees since 2012
  • The Welsh Assembly has already passed legislation that will ban tenant fees from September
  • Northern Ireland is the only country not to have any current plans to ban tenant fees.

If you would like to discuss any of the points raised, then why not book a FREE lettings review with our lettings experts at a time and date to suit you.

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