Changes put forward in the new Tenants Fee Bill will bring an end to letting fees payable by tenants and bring greater transparency to the UK let property market.
This is the aim of the new bill set before the House of Commons which is designed to improve competition, affordability and competition in the private rental market.
Currently many properties are advertised for rental at the monthly cost of the property with out a clear an upfront disclosure of additional rental fees that are to be paid by the tenant. Under the new rules, the price that is advertised is the price the tenant will pay for the rental.
The MP for Bromsgrove and Communities Secretary, Sajid Javid said;
This government is determined to make sure the housing market works for everyone. Tenants should no longer be hit by surprise fees they may struggle to afford and should only be required to pay their rent alongside a refundable deposit.
We’re delivering on our promise to ban letting agent fees, alongside other measures to make renting fairer and increase protection for renters.
In addition to the removal of tenant fees for letting the draft bill will also introduce the following measures;
- Cap holding deposits at no more than one week’s rent and security deposits at no more than 6 weeks’ rent. The draft bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant.
- Create a civil offence with a fine of £5,000 for an initial breach of the ban on letting agent fees and creating a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Civil penalties of up to £30,000 can be issued as an alternative to prosecution.
- Require Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees.
- Appoint a lead enforcement authority in the lettings sector.
- Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.
The government has also announced consultation on the making membership of client money membership protection schemes mandatory for both managing agents and letting agents that handle client money offering greater financial protection to both landlords and tenants.