Student Spotlight – Agency Letting Fees: Banned
The story so far
Over the past year the problems with letting fees have featured in the news one way or another and it’s only recently that the government has acted.
It costs the average person over £200 in tenant fees to move house and that doesn’t even include the deposit they have to pay – usually a minimum amount equivalent to between month and six weeks’ rent. If the costs of renting are not astronomical enough already, the fees letting agencies are charging for things like references was just adding to the problem.
For a lot of people though agency fees are well within the region of £500 or even more. That with a landlord’s deposit makes it nigh on impossible for anyone to rent.
The Bill on the ban of letting fees was introduced back in 2017. The new plans that were introduced meant that tenants would only be able to be charged for a deposit and rent. Great news for renters!
Luckily, last month it was announced that the new tenant fees bill would come into place to prevent agencies being able to charge these fees.
When will the changes come into force?
Well as of the 1st June 2019 the ban came into force. The Tenant Fees Act only applies to renters in England as this was already something that was introduced in Scotland. The act has also introduced a cap on the amount a landlord can charge a tenant in deposits; from now on a six-week deposit cap is being imposed.
But is it all as good as it seems?
Yes, agency letting fees have been banned and a cap on the amount a tenant can be charged in a deposit has also been introduced with the new act but there is also a backlash. There has been no change on agents being able to penalise tenants for things like late rent and loosing keys.
However, landlords and letting agents will be hit hard by the new law. It’s great news for tenants but agencies are said to take a hit of millions. To deter the hit, there has been discussion of possible rent increases. With the average cost of rent in England and Wales already seeing substantial rises over the past decade, this new law could end up causing more undue problems for tenants.
The ban has only been introduced last month so the effects are uncertain at this time. The Government will hope that this is a clear victory for tenants – only time will tell!