The highly-anticipated tenant fee ban came into force on 1st June, meaning tenancy deposits have since been capped and landlords and agents are banned from charging fees above a certain limit, according to the Ministry of Housing, Communities and Local Government (MHCLG).

The new legislation, which already exists in Scotland, protects tenants from high letting fees, scrapping tenancy deposits that renters pay at the start of their tenancy to a maximum of five weeks’ rent. Unexpected fees and high deposits, which the Government believes made properties harder for individuals to afford, were often not clearly explained and left many tenants unaware of the true costs of renting.

With fees now capped, the MHCLG estimated that it would save tenants across the UK at least £240 million a year or up to £70 per household.

Mortgages for Business – MPU

Fines for Act violation

Moreover, the Tenant Fees Act imposed potential fines of up to £30,000 on landlords and agents who breach the new laws. This is all part of the UK Government’s efforts to make the housing market fairer for everyone, according to the MHCLG.

James Brokenshire, secretary of state for housing, commented: “[The Tenant fees Act] puts a stop to tenants being charged hundreds of pounds for admin or renewal fees. In addition, under the Act’s default fee provision, landlords and agents are only able to recover reasonably incurred costs from tenants for lost keys or other security devices and must provide evidence of these costs before they can impose any charges. They may also charge a default fee in relation to late rent.”

Mr Brokenshire added: “The Act ensures that tenants who have been charged unfair fees can get their money back. Trading Standards or the First-tier Tribunal can require landlords and agents to pay back any prohibited payment or any unlawfully retained holding deposit within 7 to 14 days.”

He concluded that these provisions help reduce the costs that tenants can face at the outset of, during, the renewal of and termination of a tenancy. The Act is part of a wider package of reforms by the Government, aimed at rebalancing the relationship between tenants and landlords to deliver a fairer, better quality and more affordable private rental market.

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Pia Subramaniam
Pia provides Property Notify readers with her insights into the UK property market, through her reporting on the social impact of various housing policies. She also specialises in covering the relationship between immigration and housing, as well as investigating loopholes in the market and concerns voiced by landlords and tenants.

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