£157,000,000s worth of tenants fees banned!
These sorts of figures may just be the reason behind the government’s decision to create the Tenant Fees Act 2019. This bans most Letting Agent fees and also caps deposits paid by tenants to the private rental sector. The new ban applies from every renewed tenancy agreement signed on or after 01/06/2019.
A Letting Agent will now only be allowed to charge the following :
• A refundable tenancy deposit capped at no more than 5 weeks rent.
• A refundable holding deposit capped at no more than 1 weeks rent.
• Payments associated with early termination of the tenancy when requested by the tenant.
• Payments in respect of utilities.
• A default fee for late payment of rent and replacement of a lost key or similar.
It has been almost three years in the pipeline but the ban now brings England in line with Scotland. Citizens Advice chief executive Gillian Guy says. “For too long, families and other renters have had to hand over hundreds of pounds on unfair and uncompetitive letting fees every time they moved home.” It’s true that we we won’t see the results of the ban for some time, but there was no doubt that the balance of fees was becoming unfair to the tenant. The big question is however, was a full ban the right move? Or will agents pass the fees onto the landlords who will in turn increase the rents?
Te act that’s been described as ‘’the biggest change to hit the lettings industry in decades’’ may be exactly what those struggling to get on the housing ladder needed. Alternatively Landlords and Estate Agents may be asking whether their businesses are feasible anymore, causing job losses and a lower supply in housing.