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Letting Fee Ban!?

What is the Tenant Fee bill? It is a piece of proposed legislation which has two key changes to the way private renting works in England (fees have been illegal in Scotland since 1984). They are: 1) A ban on all of the upfront fees letting agents currently charge you before you rent a property. These range from so-called ‘administrative fees’, ‘credit check fees’, ‘tenancy renewal fees’ or mysteriously costly ‘referencing costs’. Under the new legislation, the only fees renters can be charged are: the rent, a refundable security deposit, a refundable holding deposit and what will be known as ‘default fees’. 2) It also introduces a cap on deposits and states that landlords and letting agents will only be allowed to charge a maximum of six weeks’ rent for security deposits, and one week’s rent for holding deposits.

Is it true that letting agents will sneakily try to recoup the fees back in other ways? Think the inclusion of ‘default fees’ in a proposal to ban letting agents’ fees sounds a bit weird? You’re not alone. Shelter has spoken out against their inclusion in the draft legislation. Polly Neate, Shelter’s chief executive, reported that default fees risk watering down the ban by leaving “the backdoor open for agents to carry on charging fees”. “Renters could see themselves hit with more ridiculous charges for things like leaving a jar in the kitchen cupboard or having a bin bag taken out.”

So, what exactly are default fees? A default fee could be anything. It could cover something like losing your key. For example, Natasha* was recently charged £400 by her landlord when she lost her keys.

When is the ban actually coming into effect? That’s up for debate. The bill currently awaits its second reading in the House of Commons, after that there will be what’s known as a ‘committee stage’ followed by a ‘report stage’ and, then, a third reading before it can go through. The Government currently expects the ban to come into force in 2019.

Will it actually make rents go up? There is no proof of this. Research, commissioned by Shelter, found landlords in Scotland, where there has been a fee ban fully in place since 2012, were no more likely to have increased rents since 2012 than landlords elsewhere in the UK.

Will it actually make rents go up? There is no proof of this. Research, commissioned by Shelter, found landlords in Scotland, where there has been a fee ban fully in place since 2012, were no more likely to have increased rents since 2012 than landlords elsewhere in the UK.

*name changed for privacy

Published 9 May 2018

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