Just before we start this article about the Tenant Fees Ban, we have published an updated application for accommodation and application to be a guarantor which are GDPR compliant (we believe). More details will be published in an article after the tenancy agreements have been updated soon. And now onto the main article …
James Brokenshire has marked his second day in office as secretary of state for housing, communities and local government by introducing the long-awaited Tenants Fee Bill to Parliament.
He claims the new legislation will save tenants in England £240 million a year in fees paid to letting agents and landlords – with letting agents the major losers.
An impact statement drafted alongside the bill by civil servants estimates letting agents will lose £157 million in revenue in the first year after the bill becomes law.
“This government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs,” said Brokenshire.
“That’s why we’re delivering our promise to ban letting fees.”
The measure will stop letting agents and landlords charging fees other than those linked to:
- A change or early end of a tenancy requested by a tenant
- Utilities, communication services and Council Tax
- Payments that are the fault of a tenant, like replacing lost key
The bill lists several more measures aimed at cutting costs and safeguarding the rights of renters, including:
- Limiting holding deposits to no more than a week’s rent
- Capping charges for changing the terms of a tenancy to £50 unless the landlord shows more expense was incurred
- Instating fines of up to £5,000 for the first breach of the fee ban, then introducing a criminal offence if someone is fined or convicted of the same offence within five years. Fines of up to £30,000 can charged instead of taking offenders to court
- Allowing tenants to recover unlawfully charged fees
- Stopping landlords from repossessing a home until they have refunded any unlawfully charged fees
The bill is expected to come into force next year.
Brokenshire took over from Sajid Javid, who moved to the Home Office to fill the chair vacated by former Home Secretary Amber Rudd, who resigned over misleading MPS about government targets to remove illegal immigrants.