The tenant fees ban for letting agents is likely to stretch across Wales if a new law is passed by the Welsh Assembly.
Lawmakers in Wales are already replacing assured shorthold tenancies with new standard contracts under the Renting Homes (Wales) Act 2016, which may to come into force as soon as 2019.
Now, they have introduced the Renting Homes (Fees etc.) (Wales) Bill to axe charges connected to agreeing a new tenancy or renewing an existing contract.
The new bill will list the payments landlords and letting agents can charge, which are expected to cap security and holding deposits.
Documents published introducing the bill explain that private rented homes make up 15% of the housing stock in Wales, but renting a home is becoming harder for many people due to the cost of upfront fees.
“Unregulated fees being charged to tenants by letting agents and others have been highlighted as the main barrier to many people accessing the market and good quality rented housing,” says the report.
“Tenants within the private rented sector spend a higher proportion of their income paying the costs of renting their homes than owner occupiers or those within social housing. The impact of additional costs is consequently greater. Action is therefore needed to restrict such costs to ensure the sector can be accessed by those needing or wishing to rent privately.”
Welsh Assembly research highlighted that high fees were unjustified.
“These issues included a wide variation in fees charged by letting agents for a particular service with no real justification for the variation; a lack of clarity on what exactly the fee covers; and a real lack of choice for potential tenants,” said the report.
If tenant fees are banned in Wales, the measurer will bring the country into line with England, where similar laws are expected in April 2019 and Scotland, where fees have been outlawed since 2012.