The UK Tenant Fees Act comes into force

UK: Housing campaigners toasted The Tenant Fees Act coming into force in the UK on Saturday, meaning tenants will be protected from extortionate letting fees with many seeing tenancy deposits capped at five weeks’ rent.

In many cases, unexpected fees and high deposits can make properties harder for people to afford and are often not explained upfront with clarity. Therefore, many prospective tenants are left in limbo and unaware of the exact costs of renting a property.

The government believes The Tenant Fees Act will put a stop to such fees being imposed by landlords and agents. It says the Act is set to save tenants across England at least £240 million a year, or up to £70 per household.

The Act also caps the tenancy deposits that renters pay at the start of their tenancy at the equivalent of 5 weeks’ rent. This gives people the assurance that, legally, they cannot be expected to pay more than this (where the total annual rent is less than £50,000) to secure a property.

Communities Secretary James Brokenshire MP said: “From today, tenants will no longer be stung by unreasonable costs from agents or landlords, thanks to the implementation of the Tenant Fees Act.

“This Act bans unnecessary letting fees and caps the majority of deposits at five weeks’ rent – helping renters keep more of their hard-earned cash. Alongside our recent announcement to scrap no fault evictions in the sector, this will make renting fairer and more transparent – creating a housing market that works for everyone,” he added.

The Act aims to prevent tenants being charged hundreds of pounds for admin or renewal fees. Furthermore, under the Act’s default fee provision, landlords and agents will only be able to recover reasonably incurred costs from tenants for lost keys or other security devices and are required to provide evidence of these costs before they can impose any charges.

The Act ensures that tenants who have been charged unreasonable fees can get their money back. Trading Standards or the First-tier Tribunal have the power to force landlords and agents to pay back any prohibited payment or any unlawfully retained holding deposit within seven to 14 days.

The provisions therefore help to reduce the costs that tenants can face during the renewal of and at the point of termination of a tenancy.

Earlier this year, the government announced plans to prevent private landlords from evicting tenants from their homes at short notice without good reason, as it prepares to consult on abolishing Section 21 evictions.

The government is also proposing the following steps in order to reform and improve renting standards:

• A national database of rogue landlords and agents to track those that have been banned from letting

• A review to assess how well the Housing Health and Safety Rating System (HHSRS) works in practice and ensure it is fit for purpose

• Mandatory client money protection, by which rental money held by letting agents is safeguarded against theft and fraud

• Proposals for mandatory redress scheme membership for landlords

• Proposals for an independent regulator to oversee property agents, setting standards and maintaining minimum qualifications

• Mandatory five-yearly electrical installation safety inspections

• Considering the case for a specialist housing court to provide greater access to justice for landlords and tenants in property disputes