Tenant Fees Act

The Tenant Fees Act sets out the Government’s approach to banning letting fees for tenants. 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.

Economic Impact of the Proposed Ban on Letting Agents Fees

Our independent research commissioned by Capital Economics predicts that as a result of a full ban on fees tenants will pay an increased rent of £103 per year.

Residential lettings activity provides 58,000 jobs, which generate employee taxes in the order of £400 million for the Exchequer each year

Fees charged to tenants generate around £700 million per year or approximately 20% of the industry's turnover.

Read the full report

Representing members