Residential letting fees are nearly a thing of the past!
The Tenant Fee Bill (“the Bill”), originally published in November 2017, has undergone the committee stage of pre-legislative scrutiny with no amendments. The Bill will now head to Parliament for the Report Stage. It appears very likely that the Bill is going to become law.
The Bill intends to make the residential lettings market more affordable for the growing 4.7 million private residential renters in England. The Government is doing this by capping deposits and banning agents and landlords from charging tenants any fees (unless expressly permitted). Currently the average fees paid by residential tenants is around £120-750 per letting.
The payments agents and landlords will be able to charge include rent, default fees, and capped fees for assigning a tenancy. The deposit taken will be limited to 6 weeks rent.
Given 75% of tenants state their reason they cannot move house is because of the crippling letting fees, promoters of the Bill state it will impact tenants’ disposable income and therefore the economy as a whole. However, the Bill will clearly removal vital income stream from agents, who across England and Wales take in £700million in fees alone. Opponents to the Bill believe this will result in job losses, reduced quality of agents and tenants being charged through the back door ie. through rent which is a permitted payment.
The Bill is likely to become law in late 2018/early 2019.