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01/11/2017

Bill to ban letting fees introduced to Parliament

Words: Laura Edgar
Letting fees / iStock-625310052

The draft Tenant Fees Bill has been introduced into Parliament today (1 November), as the government look to ban letting fees for tenants.

The bill sets out the government’s approach to achieving this, with evidence suggesting the level of fees charged are not often clearly or consistently explained.

The government said its plans will help to improve transparency, affordability and competition in the private rental market. They should also stop estate agents from double charging both tenants and landlords for the same services.

Communities secretary Sajid Javid said: “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.”

Measure in the bill include:

  • Capping holding deposits to no more than one week’s rent and security deposits to no more than six week’s rent.
  • Create a civil offence with a fine of £5,000 for an initial breach of the ban on letting fees and creating a criminal offence where a person has been fined or convicted of the same offence within the previous five years.
  • Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.

Martin Tett, housing spokesperson for the Local Government Association, said: “This ban on letting agent fees and a cap on holding deposits will bring much-needed clarity for the private rented sector. Excessive fees are a concern for tenants and councils, as they hamper access to the market and put pressures on other tenures, such as social or supported housing.  

“If the government expect local authorities to enforce the ban, it’s vital that they provide the resources and funding that will be needed in order to make such enforcement successful. That means making sure up-front funding is provided to support Trading Standards, and that a national information campaign is undertaken to make tenants aware of the new rules.”

As well, the government has launched a consultation on making membership of client money protection schemes mandatory for letting and managing agents that handle client money.

The draft Tenants Fees Bill can be found on the Department for Communities and Local Government website.

Image credit | iStock

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