19 Feb 12.02.2019 Tenant Fees Bill
12.02.2019 Tenant Fees Bill
In January, the government announced that the Tenant Fees Bill will come into force on 1 June 2019. The ban on lettings fees would apply to all tenancies signed after this date.
The new law banning letting fees for tenants is bringing with it changes to what renters can be charged for during their tenancy, including a cap on security deposits and an end to upfront costs such as administrative fees and costs for credit checks.
The bill is intended to reduce the number of costs tenants face when renting. It will ban letting fees paid by tenants and cap tenancy deposits, with the aim to save renters money.
The Government will publish guidance for tenants, landlords and letting agents to explain how they will be affected by the new law in spring this year.
What fees are being removed?
According to Government analysis, tenants pay an average of between £200 and £300 in letting fees during each tenancy. But now, any administration fees traditionally charged by landlords and letting agents — which can include anything from credit check fees to tenancy renewal feels or referencing fees — will be banned.
The bill also caps the amount of money a landlord or agent can request for security deposits from six weeks down to five weeks’ worth of rent.
The only exception to this rule is for high end properties, where the rent is more than £50,000 a year. The cap on these deposits will remain at six weeks.
So who will bear the costs?
Landlords will now need to meet the costs that were traditionally passed onto the tenant. However, this extra cost may simply result in higher rents.
From now on, the only costs tenants will now be liable for is their rent, any refundable deposits, council tax and utility bills, specific default charges such as losing a key, and changing or ending a tenancy early when it has been requested by the tenant.