Posted by & filed under Landlords, Regulatory, Tenants.

Last week saw another step toward the banning of letting agents fees levied at tenants when the government published its “tenants fees bill”. Originally slated for April 2018, it has been postponed to Spring 2019, likely as a result of Brexit and for many it can’t come soon enough.

A new rental is an expensive time for anyone, firstly you have to find the bond, often a month’s rent but in some parts of the country 1.5-2 times that amount and a further month in advance. To then be asked to stump up, on average, an additional £272 for fees can be a deal breaker. Part of the reasoning behind the ban was that some rogue landlords know these fees are enough to put tenants off moving, in effect trapping them in sub standard properties. A recent blog by the housing charity Shelter listed 10 of the worst fees they had come across, including

  • £210 for preparing a tenancy.
  • £500 for referencing and checks.
  • £225 per tenant for a contract renewal.
  • £200 for the end of tenancy check out.
  • And our favourite… £10 to iron the curtains!!!

These are of course the extremes and the majority of agencies and landlords are above board but fees of £140-£300 at the start of the tenancy are standard throughout the industry. The bill will bring in to law the following:

  • Ban letting agents or landlords from charging fees for the granting, renewal or continuation of a tenancy.
  • Cap holding deposits at no more than one week’s rent and security deposits at no more than 6 weeks’ rent. It is important to note that this six weeks will be ‘an upper limit and not a guideline’, with each landlord deciding this on a case by case basis.
  • 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.

For a lot of letting agents and landlords there is a lot of genuine concern. For some letting agents, this is a genuine revenue stream, which they rely on, so what do they do? Take the hit financially? Doubtful. Pass it on to landlords by increasing their finder’s fees? Possibly. Or increase rents to tenants? Another possibility. It is likely that it will be a split between the two. The good news is that at Haboth, by structuring our business in a forward thinking way by taking our selves off the high-street and using the latest software to improve efficiencies, we don’t charge fees to tenants so there will be no increase to landlords or tenants come Spring 2019. It’s just one way we are looking to change the way people rent.

If you’d like to know more about how we can ensure virtually Fee Free renting while keeping fees to landlords low too, call Haboth Lettings on 0333 012 4895 or email

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