The Government announced at the 2016 Autumn Statement that it would introduce a ban on letting agent fees paid by tenants in England to improve competition in the private rental market and give renters greater clarity and control over what they will pay. The commitment to make renting fairer for tenants was reaffirmed in the Conservative Party Manifesto.
The Tenant Fees Bill will deliver the Government’s commitment to banning letting fees paid by tenants as well as capping tenancy deposits in England to no more than six weeks rent.
The aim of the Bill is to reduce the costs that tenants can face aside from the rent itself. Renters currently pay an average of £200-£300 in letting fees per tenancy although many pay significantly more than this. There is also evidence that letting agent fees paid by tenants have increased significantly in recent years and that many tenants have experienced problems paying letting agents’ fees.
This Bill will mean that tenants will be able to see, at a glance, what a given property will cost them in the advertised rent with no hidden costs such as administration fees from letting agents, which will be paid by the landlord instead of the tenant. This should make letting agents fees more reflective of the service they offer and make them compete for landlords’ business, rather than assuming whatever fee they charge will be automatically paid by the tenants.
The Government says that this is part of a wider package of measures aimed at rebalancing the relationship between tenants and landlords in the private rented sector.
This is a Government Bill brought forward by James Brokenshire MP from the Department for Housing, Communities and Local Government.
The National Landlords Association (NLA) had expressed concerns during the draft stages of this Bill about the level at which the cap of tenancy deposits was set and negotiated the Government from four weeks rent to six.
The NLA argued that imposing an arbitrary cap on security deposits of one month’s rent would have unintended consequences, which could be damaging to certain groups of prospective tenants. It could also have the counter-productive effect of reducing some households’ abilities to secure suitable accommodation in the sector.
How to get involved
You can contact your own MP or the Department for Housing, Communities and Local Government.
If I don’t act, will it go through?
As a Government Bill, it is likely to go through.