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Good news for renters as tenant fee ban became law this week

A ban on fees to private tenants in England has cleared the House of Commons and Lords and received Royal Assent this week meaning it’s now law.

The new Act, once introduced, will ensure private tenants no longer pay fees which could run into hundreds of pounds for basic tasks and checks. A ban already exists in Scotland. Deposits are also capped at five weeks instead of six as is the norm currently. High fees have resulted in financial difficulties for many as private renter numbers exploded to 4.7 million people.




A standard three bed house in south east London would see a family need to cough up £1,500 rent in advance, a deposit of around £2,250 and fees around £500 on average. £4,250 in one lump sum is far from easy – and some people have to do that every year. The new law would save them £1,000.

Media coverage

Strangely for something that will save millions of people many hundreds, if not thousands of pounds every year, coverage in the wider media has been next to non-existent. Correct me if I’m wrong but Google news searches of the BBC turn up absolutely nothing.

Source: Savills

Given numbers of private renters has increased hugely over the past two decades (doubling to 4.7 million people) as house price rises prevent many being able to buy and social home building is next to non-existent, this lack of coverage seems utterly bizarre.

Sharp decline in home ownership among the young. Courtesy Parliament Research Briefing

There could be three things at play. One is a generational divide and another is a disconnect between those in the media and the population at large. Much of the UK media is occupied by those with wealth according to studies. Just 11% of journalists are from working class backgrounds compared to 60% of the population. Struggling to find rent and deposits may be less of an issue.

Just 19% of journalists attended a comprehensive school (or Academy). The figure for the general population is 90%.

Adverts

Another possible factor for a lack of coverage is the heavy reliance across much of the commercial media on the property industry for adverts and revenue. Estate agents and letting agents will not particularly want this news highlighted as it’s a major source of income. Given many papers have property puff piece supplements it’s a factor to consider. Tenants will be less likely to pay high fees in coming weeks and wait till the law is introduced or haggle hard beforehand.



So spread the word and let people know. The days of sheer greed in charging private tenants fees for everything under the sun is coming. Here’s one example for an unnamed agent (many more are out there and very similar):

£96 per tenant for contract

£120 for a guarantor regardless of income

£210 general admin

£120 check out fee

Total for couple = £642

And that isn’t including a cleaning fee many charge upon leaving even if the property is spotless. It can easily add £200+.

Some in the industry have argued agents will try to clawback this loss of income through higher rents. Aside from little evidence where fees are already banned, if agents could already charge more they would. And even if they did, at least the fees would be spread across 12 months rather than huge upfront payments pushing people into debt.

Finally, the UK’s largest estate agent Countrywide is in severe difficulties and charges some of the highest fees. Here is an example:

  • Tenancy Agreement – £300
  • Change of tenant during contract – £300
  • Administration Fee – £50 per tenant
  • Referencing Fee – £75 per tenant
  • Check-in fee – minimum of £72.00 
  • Guarantor Referencing Fee – £100 per guarantor
  • Agreement of Guarantee – £75
  • Saturday move in – £60

And lets not forget they’re charging landlords substantial fees at the same time. This “double gouging” is what the new law is designed to stop.

How many will adjust? They’ve had enough warning.

For now though, it’s some good news at last for private renters in England.

The ban on fees and deposit cap are introduced on June 1st 2019.




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5 Comments

  1. Chris Nash

    Perhaps it’ll receive more press coverage when it actually comes into force in June.

    • fromthemurkydepths

      Though many bills get large publicity when reaching royal assent before being enacted. This passing is still newsworthy. Compete silence is odd.

  2. CDT

    This is excellent news for private tenants and is certainly newsworthy. I think a lot of people still are not aware that landlords fees are to be banned and became law this week.

  3. Lucy

    Many estate agents charge a fee for an inventory to be carried out on start and end of the tenancy on UNFURNISHED flats that have nothing in them! Outrageous con

    • Mike S

      The agent I use charges the landlord the inventory fee. But that’s perhaps a misleading name, because it is a record of condition at the start of the tenancy. If there is any dispute as to who caused damage to either the fabric of the property OR to contents, this is the record that proves what state it was in. It’s not simply “a record of what contents are there”. If you’ve looked after the property when you are there, then it’s your protection. Remember – Deposits are now held independently, NOT by the agent or landlord, and if the landlord makes a claim, it is for an independent arbiter to decide. If the landlord is holding or deducting from the deposit directly, they are breaking the law,

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