2 May 2018 The Tenant Fees Bill was introduced to Parliament by Housing Secretary, James Brokenshire MP. The Government also issued their official response to the HCLG Select Committee report on the draft Tenant Fees Bill.
1 November 2017 The Government introduced a draft Tenant Fees Bill to Parliament to ban letting fees for tenants. The Government’s intention to do this was announced 21 June 2017 in the Queen’s Speech at the state opening of Parliament.
7 April 2017 The Government launched an eight-week consultation seeking views on the detail of how a ban should be introduced. The consultation closed 2 June and 4,724 responses were received from a range of individuals and representative bodies. The responses to the consultation have informed the Government’s approach and publishing the Bill in a draft will ensure that there is scrutiny of the Government’s proposals by parliamentarians and stakeholders before introducing legislation.
Tenant Fees Bill
The Tenant Fees Bill sets out the government’s approach to banning letting fees for tenants. The key measures of the bill include:
Security deposits must not exceed the equivalent of six weeks' rent.
Holding deposits will be capped 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
The amount that can be charged for a change to tenancy will be capped at £50 unless the landlord demonstrates that greater costs were incurred
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
Trading Standards will enforce the ban and will make provisions for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal
Landlords are prevented from recovering possession of their property via the section 21 until they have repaid any unlawfully charged fees
Enabling the appointment of a lead enforcement authority in the lettings sector
The Consumer Rights Act 2015 will be amended to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla
Local authorities will be able to ring-fence any money raised 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 keys.
Commenting on the publication of the draft Tenants Fees Bill
“The day we have been expecting since the Chancellor announced the ban on tenant fees in the Autumn Statement 2016 has arrived, with the Tenant Fees Bill beginning its passage through Parliament this afternoon.
“We do not believe the Bill will achieve its aims, as our own research last year demonstrated that tenants will end up worse off and banning fees will not result in a more affordable private rented sector.
“ARLA Propertymark has worked hard over the last 18 months to explain the unintended consequences of the ban to Government, and we’re pleased they have listened and allowed Change of Sharer, Surrender of Tenancy, holding deposits, exempted the Green Deal Charge, and capped security deposits at six weeks, rather than the Committee’s proposed five-week cap. Now that we have greater clarity on what the ban will entail, agents must start preparing for when it comes into force.”
DAVID COX Chief Executive, ARLA Propertymark
Support Our Campaign
We are in the very early stages of the legislative process. Things can change during the passage of a bill through Parliament and it is now more important than ever that those making the decisions in Westminster understand the implications of their choices.
Now is the time for agents to see their MPs and explain the vital services they provide for the fees that they charge.
Our research shows that the average fee charged by an ARLA Propertymark Protected agent is £202 per tenant. We think is fair, reasonable and far from exploitative for the services tenants receive including completing various critical checks on tenants before letting a property. We believe that the ban on fees will involve passing the costs on to landlords. Who will then look to recoup these costs elsewhere; inevitably through higher rents.
drastic impact on many people and businesses and to announce it without consultation or clarity is wrong. We do not support the banning of letting agents charging fees to tenants. We believe fees should be open, transparent and reasonable. They represent legitimate costs to the business that need to be covered. Read our proposal...
Commenting after the Autumn Statement announcement “A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market. It will be the fourth assault on the sector in just over a year, and do little to help cash poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account.” David Cox, ARLA Propertymark Chief Executive