In accordance with the new law, tenancy deposits are capped and landlords and agents are banned from charging unnecessary fees.
The Tenant Fees Act coming into force 1 June 2019 is part of the government’s work to make the UK’s housing market fairer for everyone. The highly-anticipated law will save renters across England £240 million a year, states the Ministry of Housing, Communities & Local Government.
Tenants will be protected from unfair letting fees with most seeing tenancy deposits capped at 5 weeks’ rent, putting hard-earned cash back in their pockets.
Unexpected fees and high deposits can make properties harder for people to afford and are often not clearly explained upfront – leaving many prospective tenants unaware of the true costs of renting a property.
The Tenant Fees Act now puts an end to these unnecessary fees imposed by landlords and agents. It is expected to save tenants across England at least £240 million a year, or up to £70 per household.
The Act also caps the tenancy deposits that renters pay at the start of their tenancy at the equivalent of 5 weeks’ rent. This gives people the assurance that, legally, they cannot be expected to pay more than this (where the total annual rent is less than £50,000) to secure a property.
From today, tenants will no longer be stung by unreasonable costs from agents or landlords, thanks to the implementation of the Tenant Fees Act.
– Communities Secretary Rt Hon James Brokenshire MP
From 1 June 2019, the only payments that landlords or letting agents can charge to tenants for new contracts are:
- rent
- a refundable tenancy deposit capped at no more than 5 weeks’ rent where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above
- a refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent
- payments associated with early termination of the tenancy, when requested by the tenant
- payments in respect of utilities, communication services, TV licence and Council Tax
- a default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement
Taken together, these provisions help reduce the costs that tenants can face at the outset of, during, the renewal of and termination of a tenancy. The Act ensures that tenants who have been charged unfair fees can get their money back. Trading Standards or the First-tier Tribunal can require landlords and agents to pay back any prohibited payment or any unlawfully retained holding deposit within 7 to 14 days.
Tenants, landlords, letting agents and local authority enforcement officers can consult guidance explaining how the Act affects them. Among other things, the guidance provides a list of permitted and prohibited payments, enumerates consequences of a breach of the Act for landlords and explains to tenants what they should do when their rights have been breached under the Act.
The Act is part of a wider package of reforms by the government aimed at rebalancing the relationship between tenants and landlords to deliver a fairer, better quality and more affordable private rental market. Other measures include ongoing consultations on abolition of Section 21 evictions of tenants with 8 weeks’ notice, stricter safety rules in shared homes as well as financial penalties and banning orders for rogue landlords and agents who let unfit properties.
