1 November 2017
The Government introduced a draft Tenant Fees Bill to Parliament to ban letting fees for tenants. The Government’s intention to do this was announced 21 June 2017 in the Queen’s Speech at the state opening of Parliament.

7 April 2017
The Government launched an eight week consultation seeking views on the detail of how a ban should be introduced. The consultation closed 2 June and 4,724 responses were received from a range of individuals and representative bodies. The responses to the consultation have informed the Government’s approach and publishing the Bill in draft will ensure that there is scrutiny of the Government’s proposals by parliamentarians and stakeholders before introducing legislation.

Fact sheet

Draft Tenants Fees Bill

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Draft Tenant Fees Bill

The draft Tenant Fees Bill will set out the government’s approach to banning letting fees for tenants:

  • Ban landlords and agents from requiring tenants to make any payments as a condition of their tenancy with the exception of the rent, a capped refundable security deposit, a capped refundable holding deposit and tenant default fees.
  • 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. 

Commenting on the publication of the draft Tenants Fees Bill

”We have discussed the proposal to ban letting agents fees with Government ministers and officials many times since the announcement. Having now seen the Draft Bill, it is essential that during its passage through Parliament, this legislation is shaped to make it fair to consumers, while supporting businesses to carry out the work necessary to create and maintain successful tenancies; including legal requirements such as Right to Rent checks.

“We are very pleased to see that government has listened to our call and increased maximum security deposits from four to six weeks and are encouraged that it appears those tenants who wish to break their contract will have to cover the legitimate costs of finding a new tenant.”

David Cox, ARLA Propertymark Chief Executive

Support Our Campaign

We are in the very early stages of the legislative process. Things can change during the passage of a bill through Parliament and it is now more important than ever that those making the decisions in Westminster understand the implications of their choices. 

Now is the time for agents to see their MPs and explain the vital services they provide for the fees that they charge.

Visit the campaign page 

Our Position

Our research shows that the average fee charged by an ARLA Propertymark Protected agent is £202 per tenant. We think is fair, reasonable and far from exploitative for the services tenants receive including completing various critical checks on tenants before letting a property. We believe that the ban on fees will involve passing the costs on to landlords. Who will then look to recoup these costs elsewhere; inevitably through higher rents.

It will have a drastic impact on many people and businesses and to announce it without consultation or clarity is wrong. We do not support the banning of letting agents charging fees to tenants. We believe fees should be open, transparent and reasonable. They represent legitimate costs to the business that need to be covered. Read our proposal...

Commenting after the Autumn Statement announcement

“A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market. It will be the fourth assault on the sector in just over a year, and do little to help cash poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account.”

David Cox, ARLA Propertymark Chief Executive

Economic Impact of the Proposed Ban on Letting Agents Fees

As part of our Tenant Fees campaign, we commissioned evidence on the likely economic impact of the ban from leading consultancy Capital Economics. The research shows that the residential lettings sector turns over around £4billion per year and employs some 58,000 workers. Fees charged to tenants generate around £700 million per year or approximately 20% of the industry's turnover.

Capital Economics predict that in the event of an outright ban agents stand to lose £200 million in turnover and a staggering 3,000 jobs could be lost.

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Boards

The Consultation

The Government announced on 23 November at the 2016 Autumn Statement that it would consult on introducing a ban on letting agent fees paid by tenants, to improve competition in the private rental market and give renters greater clarity and control over what they will pay.

The Department for Communities and Local Government have now published a summary of responses and its response to the consultation on banning letting fees paid by tenants in England.

ARLA Propertymark responded to the consultation. 

Read our consultation response

The Government have listened to our call and increased maximum security deposits from four to six weeks and are encouraged that it appears those tenants who wish to break their contract will have to cover the legitimate costs of finding a new tenant.     

Getting Members' Views Heard

After the announcement on 23 November 2016, ARLA Propertymark Chief Executive, David Cox spoke to the media to make sure members' point of view was being heard. On the day of the announcement, he held six national news interviews including BBC Radio 4’s Today programme and BBC 5 Live.

We have written to the Chancellor and the Housing Minister explaining the importance talking in person, as soon as possible to discuss how the ban will impact the industry. We've also written to the First Minister in Wales requesting a meeting to ensure that the Welsh Government understand the evidence around fees after Assembly Members called for a ban in December.   

In January, the First Minister replied saying that the Welsh Government is yet to make a decision on banning letting agent fees. However, they will review the evidence that is currently available including assessing the impact of the ban in Scotland and look at the results of the consultation in England. We are continuing to engage with representatives from the Welsh Government.

ARLA Propertymark has discussed the proposal to ban letting agent fees with Government Ministers and officials many times since the announcement. We, along with many members, have also met with MPs to explain the effects that the ban will have on the industry. 

What Have We Been Doing for Members?

Gathering evidence

Following the announcement, we asked for members feedback. Since then we have received hundreds of emails from members giving their views on how the ban will affect the industry.

Then as part of our monthly survey, we gathered actual facts and figures from members to reinforce the anecdotal evidence we have received by email. To read a copy of our findings please check our housing research page.   

This evidence is crucial to forming a comprehensive argument for the industry.

Challenging Government

Behind the scenes, we are making every effort to inform and influence politicians and officials at the Department for Communities and Local Government on the impact of the ban. It is essential we educate that government to the full range of practical implications that a ban would have.

Keeping members informed

We will keep our members informed every step of the way through our website news and emails to members.