Government moves closer to lettings fee ban

3 May 2018
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A new Bill has been introduced into Parliament to bring an end to lettings fees across England and help save tenants millions of pounds in unfair charges.

The Tenants Fee Bill, which will come into effect next year, aims to crack down on lettings agents charging huge fees to renters and to make the rental market fairer and more transparent. 

The new law will ensure that deposits paid at the start of a tenancy cannot exceed six weeks’ rent. Other measures will include capping the amount that can be charged for a change to tenancy at£50 and capping holding deposits at a maximum of a weeks’ rent. 

Housing Secretary James Brokenshire says: “This government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs.”

David Cox, chief executive at ARLA Propertymark, the professional body for letting agents, says: “We do not believe the Bill will achieve its aims as our own research last year demonstrated that tenants will end up worse off and banning fees will not result in a more affordable private rented sector.”

As a result of the bill, lettings agents are likely to charge landlords for services such as credit and reference check and administration. But ARLA has warned that landlords were likely to simply pass on any extra costs that they suffer to tenants, which could add £103 a year to tenants' bills. It also has suggested that service levels to tenants would likely drop too. 

First mooted in 2016, the new legislation will aim to stop landlords and letting agents double-charging for the same services. It is hope the stricter rules will increase competition and help to improve quality and reduce costs for tenants. 

Mr Cox adds: “Now that we have greater clarity on what the ban will entail, lettings agents must start preparing for when it comes into force.” 

 

 

 

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