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.
- 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.