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Letting Agents' Fees Ban: draft Bill published today

The draft Bill to ban letting agents’ fees levied on tenants has been published - it’s to be called the Tenants’ Fees Bill.

A statement from the Department for Communities and Local Government this morning says the Bill will help millions of renters. 

Communities Secretary Sajid Javid says: “Tenants should no longer be hit by surprise fees they may struggle to afford and should only be required to pay their rent alongside a refundable deposit. We’re delivering on our promise to ban letting agent fees, alongside other measures to make renting fairer and increase protection for renters.”

Under the proposed legislation tenants can be asked to pay only their rent and a deposit; this will also limit holding deposits to no more than one week’s rent, and security deposits at no more than the equivalent of six weeks’ rent.

There will be fines of up to £5,000 for agents breaking the law and if there are two or more contraventions of the law within five years, fines can extend up to £30,000 or criminal prosecution.

The draft Bill will also prevent letting agents from double charging both tenants and landlords for the same services and local authority trading standards teams will be charged with enforcing the ban.

Normal processes for the Bill through Parliament would suggest that it would become law in the spring at the earliest. You can see the draft Bill here.

Meanwhile the Government has launched yet another consultation period today - this time on making membership of client money protection schemes mandatory for letting and managing agents that handle client money.

  • Simon shinerock

    We wait with baited breath

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    ........does anyone think this is going to help Tenants.......... who exactly is going to provide a service for nothing......... except tax payer funded institutions........ and their service seems to only apply to people who are working full time and can pay their rent...........

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    It's ridiculous. Some admin staff will lose their jobs. Tax revenue from agents will go down. So many of our tenants are home owners themselves they are only renting to work in another part of the country they are not vulnerable people. A subsidy for tenants in need (like a FTB stamp duty tax break) would be far better. A cap on maximum chargeable also better. London tenant fee ban only best of all!! More red tape and over-regulation.

  • Robert Ulph

    As stated all along this WILL increase rents as Landlords try and recoup the extra costs passed to them. Agents don't work for free and with my studies even tenants realise that it will not actually make renting cheaper. All we can do now is make sure the actual bill doesn't have any nasty surprises in it and if so we consult with our local MP's to tweak it. The time for moaning has to stop, its going to happen we just need to make sure we shape the bill in as best way as possible.

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    Im sick of the of the constant attacs on the letting industy when the majority offer a great service for the fees charged, once our industey is driven into the ground will the government turn its attention to other industries ripping off the general public,
    Ticket websites chrging £7.00 per ticket to print and post ( or even e tickets where no work is involved at all) ? banks charging extortionate interest rates forcing more people into poverty? insurance companies that just throw a figure into the air with no justification , airlinesand holiday companies quadrupeling thier fairs during school holidays.

    I could go on but its us hardworking letting agents that are going to feel the pain for the sake of a outdated political parties quest for more voters.

    Rant Over

  • jeremy clarke

    Ill conceived from day 1! Why would a tenant be hit by surprise fees? There is legislation already to prevent this and to prosecute those who choose to comply; that is of course, if you can get anyone from trading standards/local council away from their cosy offices to do anything! Certainly our local TSO (25 miles away) cannot be arsed! Any legislation needs to be enforced before introducing even more and regardless of that the agents & landlords who currently ignore legislation will continue to do so, often dealing with the vulnerable tenants who government want to protect!
    I just hope that very soon government realise that you cannot keep bashing away and interfering with a business that generally works well and expect it to continue performing well as well as undertaking more and more tasks imposed by government. There are many other industries such as mortgage companies, car hire firms, car leasing firms, holiday companies, lawyers, banks.... all of which need policing far more than an industry that affects a lower proportion of society! I suspect that more people have gripes about booking holidays or concert tickets than have gripes about paying a small amount of money to ensure a roof over their heads!

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    This infuriates me. Referencing costs money, administrators need a salary and work hard for hours to ensure all the paper work is done correctly, who on earth does all this hard work for nothing? No tenant worth their while would expect to get a nice home for absolutely zilch, yet letting agents are expected to offer it for nothing but the monthly rent and deposit. Ultimately, the tenant will still pay as letting agents pass their loss onto the landlords via increased fees, thus inevitably increasing the rent for the tenant. This is the most stupid idea I've ever heard and will end up costing the tenant more. Why don't they concentrate on the extortionate fees charged by banks, credit card companies and TV/Broadband providers? I was literally charged £300 to disconnect from a service I didn't even want - now that's unfair. I don't think charging a couple of hundred quid to give someone a new home that they desire is unfair at all.

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    The only way I can see this possibly working is tenants referencing themselves through reputable referencing companies - Rent4sure, letsXL, Homelet etc and then providing these to Lettings Agents/Landlords to prove they are acceptable tenants.

    The agents will still need to confirm the reports are genuine though but as long as the referencing companies agree to confirm this for each tenant, then it should work, in theory.

    jeremy clarke

    That may work unless landlords require something like rent guarantee in which case the checks will need to comply. We are always very diligent but we get tenants leaving our properties and going to properties with other agents or private landlords where we are not even approached for any type of reference; frustrating when our tenant tells us that they've paid £400 or so for referencing and admin!
    I can see some agents and landlords not bothering at all and the courts will get clogged up with landlords trying to get properties back from tenants not paying rent et al!

     
  • jeremy clarke

    Here it is folks! Tough on tenants who require guarantors or who have pets, cannot see why any agent or landlord will take them without deposit security or why they would "absorb" the cost of yet more checks on guarantors?
    Poorly thought through, ignorant of all "consultation" and industry experts!
    https://thenegotiator.co.uk/draft-tenant-fees-bill-published/

  • Angus Shield

    As Charlie Brown put it "Good Grief". I have been a Letting Agent and (Block) Managing Agent for over 20 years now. With costs/charges to most of it is question of choice. Our tenants are perfectly willing to pay a reasonable fee, they know where they stand and we all get on with life.
    Many tenants/homeowners elect to pay TV subscriptions, car HP/leasing, Gym membership, maintain fashion/appearance/store cards, peak-time holidays before cost of housing. If any of these are cancelled/altered then a likely, unavoidable administration charge would be levied - are you listening Sajid Javid and prepared to regulate these as well?!
    Just let the industry get on with what its been doing for years now; the local are fee 'landscape' will naturally determine the 'pavement rate' of costs & charges.
    I ask again; how many Ministers & Lords are landlords?

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