Generation Rent claims Tenant Fees Act saves money for renters but ignores consequences

Generation Rent claim the Tenant Fees Act has saved tenants nearly £900 million but fails to mention the unintended consequences of the ban on fees.

The Tenant Fees Act, which became law in 2019, bans landlords and letting agents from charging higher fees and caps tenancy deposits paid by tenants.

However, as reported on Property118, the introduction of caps and restrictions on tenancy deposits, has caused trouble for pet owners.

Fees gave letting agents a licence to print money

According to Generation Rent, in the year before the ban came into force, 45% of the 1.05 million tenants who moved home were charged fees, with an average cost of £269 per household.

Generation Rent claims that if these fees had continued at the same rate, tenants would have been charged hundreds of millions of pounds more each year when moving.

However, using calculations based on the English Housing Survey, the tenant group estimates that renters in England have now saved approximately £889 million due to the ban.

Ben Twomey, chief executive of Generation Rent, accuses letting agents of profiting from tenants.

He said: “Before they were banned, fees gave letting agents a licence to print money, with some agents charging as much as £800 to start a tenancy. Renters had little option but to pay the fees, which also made it difficult to compare the true cost of renting a home.

“Since it came into force, the Tenant Fees Act has saved renters nearly a billion pounds, and simplified the process of finding a home. But there is still much more to do to make renting more affordable and reduce unwanted moves. We want to see more positives like the Tenant Fees Act, and are committed to fighting to rebalance the system, and get more money back into renters’ pockets – where it belongs.”

Failure of landlords or letting agents to return holding deposits

Generation Rent also reveals a total of 68 Tenant Fees Act tribunal cases since it came into force six years ago.

Almost three-quarters (72%) returned a positive outcome for the tenant, meaning that at least some of the contested sum (or, in the case of 62% of all cases, all of it) was returned to the tenant.

The most common dispute involved in the Tenant Fee rent tribunal cases surrounded the failure of landlords or letting agents to return holding deposits, typically when the tenancy did not go ahead, which accounted for 65% of all cases.

Tenants with pets can no longer find a place to live

However, Generation Rent fail to mention the consequences of the Tenant Fees Act.

Previously, in an article on Property118, Mick Roberts, one of Nottingham’s largest landlords who houses benefit tenants, explains the introduction of caps and restrictions on tenancy deposits means landlords in England can no longer request higher deposits for tenants with pets, making it harder for pet owners to find a place to live.

He said: “If tenants were allowed to pay a higher deposit to cover potential pet damage, and if the pet caused no damage, the tenant would simply get their deposit back — job done. That way, only those responsible for damage, around 10%, would pay for their own damage.”

“The way the government has it now, everyone loses. We all know what happened when pet deposits were scrapped — we warned them it would happen.

“Now, all pet owners pay higher rent, whereas before, if there was no damage, there was no extra charge. Now, there’s an unfair charge on every pet owner.”

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