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.
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.
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.
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%.
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.