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The government ban on letting fees in England How will it affect landlords and agents?

The government ban on letting fees in England How will it affect landlords and agents?

NEWS Kevin Parson 15th March 2018

Are you a landlord?  Are you a letting agent?  How will the new letting fees ban affect landlords and letting agents?  What does the letting fee ban mean?  Is it good for the lettings market?

The draft Tenant Fees Bill was introduced to parliament in November 2017 in a bid to help renters by ending a lot of the expensive up-front payments.  It was set up after a public consultation was carried out which showed that 9 out of every 10 tenants backed the ban on fees (which is clearly going to be the case) along with many other representative bodies from across the rental sector also having their say.

The private rental sector accounts for 4.5 million households in England, which is around 20% of the total – a huge chunk of the property market.

The reason for the bill is to improve the transparency within the industry and make renting more affordable for a greater number of people across the country.  At the moment, letting agent fees vary hugely and tenants have no say or control over these fees because the agent is appointed by the landlord.  If a tenant wants to rent a particular property, they must pay the fees.

There is also going to be a consultation on making membership of client money protection schemes mandatory, with the aim to give landlords and tenants greater security that their money is in safe hands.  If anything goes wrong, both the landlord and the tenants will be compensated if their money isn’t repaid, giving both parties the ‘peace of mind’ they need.

If the Tenant Fees Bill is introduced, this is what it will mean for landlords, tenants and agents in England?


·       Holding deposits will be capped at an amount that is no more than one week’s rent and security deposits will be capped at no more than 6 week’s rent.  The holding deposit will be returned to the tenant.  This means that landlords will no longer be able to charge higher fees upfront, meaning more tenants will be in a position to rent – which will consequently boost the rental market.


·       Any breach of the ban on letting agent fees will incur a fine of £5000 for the first breach, which will then become a criminal offence if breached again within a 5-year period of the initial offence.  This protects tenants from being charged unofficial fees by a letting agent and keeps everything equal and above board.



·       Trading Standards will be able to enforce the letting fees ban, and help any aggrieved tenants recover any fees that have been unlawfully charged.  Again, this backs up the government scheme and gives the tenants a point of contact to help with any claims.


·       A lead enforcement authority will be appointed in the lettings sector -  this will promote and encourage the new laws across the whole of England.



·       The Consumer Rights Act 2015 will be amended to include large property websites such as Rightmove, who will also have to adhere to the new transparency requirements (not just high street agents).


·       Both landlords and agents will have to be a member of a Client Money Protection Scheme which will give both parties the security of knowing their money is protected.


What do you think about the letting fees ban?  Do you think it’s a good idea, or do you believe the current system is sufficient?  We would love to hear your ideas and opinions on this topic, or indeed any other property matters.

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