Lettings Market Brief: The Tenant Fee Ban is here – are you ready?
We have been busy preparing for the new Tenant Fee Ban which becomes law on 1st June, ensuring that both our landlords and tenants are aware of the legislation and how it will affect them.
If you’re not yet familiar with this new piece of legislation, the key measures of the Act include:
- Tenancy Deposits must not exceed the equivalent of five weeks' rent (unless the annual rent exceeds £50,000 in which case deposits are capped at six weeks’ rent).
- Holding Deposits will be capped at no more than one week’s rent.
- The amount that can be charged for a change to a tenancy will be capped at £50 unless the landlord demonstrates that greater costs were incurred.
- The Consumer Rights Act 2015 is amended to specify that the letting agent transparency requirements should apply to third-party websites.
Alongside rent and deposits, agents and landlords will only be permitted to charge tenants fees associated with:
- A change or early termination of a tenancy when requested by the tenant.
- Utilities, communication services and Council Tax.
- Payments arising from a default by the tenant where they have had to replace keys or a respective security device, or a charge for late rent payment (not exceeding 3% above the bank of England base rate).
A breach of the fees ban will be a civil offence with a financial penalty of up to £5,000.
At Hudson Moody, as with all reputable agents, we have always maintained a reasonable fee level for both tenants and landlords, so the level of change required to our policies is relatively small. We will continue to provide a high-quality service to both our landlords and tenants to ensure they’re always experiencing good value for money.
Of course, the real impact of the Tenant Fee Ban is yet to be seen, however we are confident that it will have a positive impact on the industry by removing any hidden fees for tenants and putting a stop to unreputable agents charging excessive and unreasonable fees.
If you’re a landlord, tenant or looking to purchase a buy-to-let property, or rent a property, please get in touch if you have any questions about this new legislation.