Tenant Fees Ban – Measures affecting Landlords and Agents

by Property 118

9:11 AM, 7th May 2018
About 2 years ago

Tenant Fees Ban – Measures affecting Landlords and Agents

Make Text Bigger
Tenant Fees Ban – Measures affecting Landlords and Agents

Government press release on the action to end letting fees.

New Housing Secretary Rt Hon James Brokenshire MP said: “This government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs.

“That’s why we’re delivering our promise to ban letting fees, alongside other measures to make renting fairer and more transparent.”

Key Measures of the Bill:

Bring an end to letting fees and save tenants around £240 million a year, according to government figures.

The deposit at the start of the tenancy cannot exceed 6 weeks’ rent.

Along with

  • capping holding deposits at no more than one week’s rent. The Bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant
  • capping the amount that can be charged for a change to tenancy at £50 unless the landlord demonstrates that greater costs were incurred
  • creating a financial penalty with a fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution
  • requiring Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal
  • prevents landlords from recovering possession of their property via the section 21 Housing Act 1988 procedure until they have repaid any unlawfully charged fees
  • enabling the appointment of a lead enforcement authority in the lettings sector
  • amending the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla
  • local authorities will be able to retain the money raised through financial penalties with this money reserved for future local housing enforcement

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 such as replacing lost key

All proposals relate to England only. The ban on letting fees will apply to assured shorthold tenancies and licences to occupy in the private rented sector.



Comments

Jeffrey Maxfield-Wood

18:43 PM, 7th May 2018
About 2 years ago

Interestingly people are missing another aspect of this recent attack on the PRS.
They are making this a criminal offence and attaching at possible £30k fine, am I mistaken or do we still live in a rational society. do we really warrant such a heavy handed approach, watch out for the fee police.
This only applies to the PRS, the councils and housing associations continue to be excluded, being free to renege on repairs and housing standards!!!
Again us landlords who do everything by the book pay for the ones who dont.
section 24, time to sell up!!

SammyG

19:03 PM, 7th May 2018
About 2 years ago

Reply to the comment left by Monty Bodkin at 07/05/2018 - 16:54
In effect, some of agents' income is getting redistributed to self managing landlords. Your point illustrates how agents cannot possibly pass on all of the fees.

Monty Bodkin

20:52 PM, 7th May 2018
About 2 years ago

Reply to the comment left by Jeffrey Maxfield-Wood at 07/05/2018 - 18:43"section 24, time to sell up!!"

No, time to adapt.

To use Osbornes level playing field bullshit analogy-
They can move the goalposts but they can't change the game.

H B

21:59 PM, 7th May 2018
About 2 years ago

Reply to the comment left by Sue Marven at 07/05/2018 - 15:38
I think the idea is that you add the cost of doing references into the rent.

Sue Marven

10:36 AM, 8th May 2018
About 2 years ago

Reply to the comment left by H B at 07/05/2018 - 21:59
Adding referencing to the rent is ok if it’s the only person that you reference. In some cases I’ve referenced 3 families as they are not honest about their financial situation. It only costs me £21 a time but I don’t want to waste money.

Ian Narbeth

10:52 AM, 8th May 2018
About 2 years ago

Mr Brokenshire is quoted as saying: "This government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs."
Let us analyse this. The first sentence is fatuous. You can tell this by looking at the opposite. Who is advocating for a housing market "unfit" for the future or one "fit for the past"? No one. This formulation can apply to any and every policy you can think of.
The second sentence is illogical and a non sequitur with the first. The fees may be unwelcome but they are not in many cases "unexpected". If you want to deal with THAT problem, it is easy. Require the fees to be published and explained to the tenant before the tenant has to hand over money. Instead, the baby has been thrown out with the bathwater. Does Mr Brokenshire think there is a magical land where it costs nothing to carry out reference checks? That the landlord should bear the costs of a time-wasting liar (who has almost certainly committed an offence under the Fraud Act - "it's a civil matter sir" - PC Plod) who says he/she has no CCJs and is not bankrupt?
Funny how for years the Home Office made a handsome profit doing the admin for people to obtain citizenship (they still do unless you come within the Windrush cohort) but Mr Brokenshire thinks landlords should bear the cost of vital checks. What would have been wrong with limiting costs to a fixed amount or a fixed percentage of the rent?

As has been commented above, this nonsense has been brought in by a Conservative Government. My late father-in-law wisely noted: "Doesn't matter whether you vote Conservative or Labour, they are all socialists."

Monty Bodkin

12:36 PM, 8th May 2018
About 2 years ago

Reply to the comment left by Sue Marven at 08/05/2018 - 10:36
Standard questions on enquiring, any that don't add up or aren't satisfactory don't get a viewing. (I already reject 50% of applicants, which will be getting more stringent when I have to pay for the check).

Successful potential applicant shows their last 3 months bank statements, previous landlords references and payslips. Perhaps even show their own credit referencing if they are switched on.

Verify all you can, then check the bankruptcy and CCJ register (3 quid). Once as satisfied as you reasonably can be, then pay for full credit referencing. Maybe get them to pay upfront as the refundable holding deposit- although with the risk of huge fines and no section 21, I can't see holding deposits taking off.

Referencing cost included within the monthly rent.

If rogue tenants can apply for properties with impunity, landlords are going to have to be very, very careful.

Louise

13:00 PM, 8th May 2018
About 2 years ago

Well we have been renting for over 11years now!
We have moved five times during the 11 year period, and we both worked’ i now dont work as we have a son of nearly two years old, i would say we have seen massive increase in rents eveywhere in the south of england which i think is becoming a big problem for families across the south of england! We have never missed one single payment on our rent ever or our bills including council tax.... i think that when agents and landlords are over charging honest and decent tenants this is a massive issue,as not everybody is untrustworthy!!
Also as i said i dont work as my current job was as a nanny in which i earnt fairly good money, but it now makes no sense for me to go back to work as a nanny as i would have to pay high costs in childcare for my son which means we wouldn’t be any better off and why would i leave my son with somebody else while i look after somone else’s children when i think im the best person to look after him as im his mum. But that is not to say i wont go back to work just while he is under 3 as after then we will be able to get 15hours free childcare and this will help us a lot!
My husband is not a really high earner so we do struggle a bit and have to very much budget what we spend, but having my son was the best thing that has happend for us so i dint mind making sacrifices like this for a while..... but what landlords and agents don’t seem to want to understand is that not every family that rents are on massive high wages to pay all of these high fees and high rents for that matter, the local councils are not building enough or any coucil propertys for lower income families and affordable housing is not affordable to a lot of families and single people out there right now! I know so many single people who are not on 30 grand a month, but are on a decent wage just below this and the same for some families and they can not rent or buy only able to rent a room in a house? And i will definatly go back to work myself in the near future but i really think that we must think ahead now before it gets out of control and our future generation are in a worse situation!? We can not ignore this problem. I call it capitalists at its best!!

Mark Alexander

13:18 PM, 8th May 2018
About 2 years ago

Reply to the comment left by Louise at 08/05/2018 - 13:00
I think you are saying that you are capable of working but refuse to do so because you will hardly be any better off. Is that right?

If so, you are adding to the burden of the Social Security benefits designed to help the needy.

From what I have just read in your comments I conclude that you are not needy, but choose not to work. This is not a personal attack but I do have very Libertarian views in regards to benefits and tax these days.

Ian Narbeth

14:03 PM, 8th May 2018
About 2 years ago

Reply to the comment left by Louise at 08/05/2018 - 13:00Hi Louise
Thank you for sharing your story and I wish you and your husband and child well. There are problems with the housing market but I fear the tenant fees ban will not fix them or even help much. Putting another obstacle in the way of landlords and introducing draconian punishments for breaching the rules serves to increase not reduce antagonism.
The problem of high rents is one of supply and demand: too many people chasing too few places to live. Landlords have to pay high prices to buy (and are now subject to a 3% additional tax when they buy. If you add costs to any business you can expect that business to try to recoup them. Rents going up is the law of unintended consequences in action.

1 2 3 5

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

NRLA welcomes government Green Homes grant scheme

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More