The head of a tenant activist group has accused lettings agents of having had “a licence to print money” until they lobbied for change.

The Generation Rent group – in a statement marking the anniversary of the Tenants Fees Act 2019 becoming law – says that in the year before the law came into force, 45% of the 1.05m tenants who moved home were charged fees, at an average of £269 per household.

The activists calculate that, had the fees continued at this rate, tenants would collectively have been charged hundreds of millions of pounds more when they moved, every year.

The group takes credit for the law change and chief executive of Generation Rent, Ben Twomey, says: “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.”

The Tenant Fees Act ended or restricted what activists describe as “a number of unfair charges” including non-refundable fees at the start, renewal and end of tenancies, and capping deposits at five weeks’ rent for most tenancies. As agents obviously know, fees are now permitted in only limited circumstances such as altering the terms of the tenancy, replacing lost keys or late payment of rent.

Generation Rent suggests that the costs of the law fell on landlords and agents. The group says: “It was warned by some in the property industry that the banned fees would be added to rents. However, this did not appear to have happened. Rent inflation increased slightly in 2019, but only in line with wage growth, before falling in 2020.”

Since 2019 there have been 68 Tenant Fees Act tribunal cases. Almost three quarters (72%) decided in favour of the tenant. Two thirds of the cases revolved around deposit disputes.