Mirror
The days of endless bills for everything from a broken light to a new name on a lease are about to be over – and the better news is that if your landlord tries it on they’re risking a £5,000 fine the first time and jail time the second
No more letting agency fees. Ever.
Getting charged a fee by a letting agent is about to become illegal.
In fact, landlords who try it on will be slapped with a fine of up to £5,000 and if they try again could face criminal prosecution or up to £30,000 in fines.
And it’s fabulous news for tenants – previously at the mercy of lettings agents who charged as much as £300 for printing a new agreement out , or £200 for changing your surname on the forms.
Of course, not all lettings agents were trying it on, but that doesn’t mean a lot to you if yours does.
A recent English Housing Survey suggested fees typically cost £223, but 2012 research by housing charity Shelter found that one in seven tenants pays more than £500.
“An all-out ban on lettings agent fees will be cause for celebration amongst renters. Fees have become the biggest pain point for tenants in recent years. The huge variation in charges, and the lack of clarity as to what they’re for, leaves people feeling helpless,” said Matt Hutchinson, director at SpareRoom.co.uk .
“The issue is that tenants can’t choose which agent they use; they have to go with whoever’s marketing the property they want. Landlords, on the other hand, can choose who they deal with, so they’ll simply choose agents who have a fair and transparent fee structure.”
What’s changing?
Fees for picking up the keys will be banned
The draft Tenant Fees Bill will:
- Cap holding deposits at no more than one week’s rent and security deposits at no more than 6 weeks’ rent. The draft bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant.
- Create a civil offence with a fine of £5,000 for an initial breach of the ban on letting agent fees and creating a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Civil penalties of up to £30,000 can be issued as an alternative to prosecution.
- Require Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees.
- Appoint a lead enforcement authority in the lettings sector.
- Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.
“Tenants should no longer be hit by surprise fees they may struggle to afford and should only be required to pay their rent alongside a refundable deposit,” Communities Secretary Sajid Javid said.
Will rents go up?
What will happen to rents? (Image: Getty)
The worry is that, in response to this, landlords will just increase rents.
“There is, of course, a danger that these agents will now try and recoup their losses through alternative means such charging higher fees to the landlord themselves. This would be an ‘around the houses’ way of bypassing the ban on letting fees, as any additional cost to the landlord is likely to be passed down the line in higher rents,” said eMoov.co.uk founder Russell Quirk.
“The only upside is that at least this won’t be payable upfront and will go some way in reducing the initial barrier to entering the rental market as a tenant.”
But that’s not going to happen if past experience counts for anything.
Letting agent fees have been banned in Scotland since 2012 – so Shelter commissioned independent research to assess the impact of it.
They found that any increase in rents was both small and short-lived, and that’s if it happened at all – with Scottish landlords no more likely to increase rents after the ban than landlords in the rest of the UK.
That’s why we campaigned for a ban south of the border too – with the Tories the only party to say they wouldn’t before the 2015 election. And that’s why we’re delighted they have.
