Letting agent fees for tenants
The UK government banned letting agent fees for new or renewed tenancy agreements from the 1st June 2019. The aim of this was to reduce the costs that tenants face from the outset of a tenancy. Now, tenants can see what a property will cost them in the advertised rent, with no hidden costs. This is a big step for the industry, as previously letting agent fees were charged for new, existing and amended contracts. Letting agents were not guided by any price structure so costs were left to the letting agent’s discretion. Subsequently, some tenants were faced with unaffordable and most importantly unnecessary costs, such as £100 for changing a name.
Who pays the costs?
The party that contracts the service pays the costs, in this case the landlord is responsible for paying for the service. This helps to ensure the fees charged reflect the real economic value of the services provided. Tenants now have transparent fees and the confidence to know hundreds of pounds can’t be added on for ‘administrative’ services.
What fees can be charged for?
It can be confusing to know there are letting agent fees that can occur. But, these are strictly and clearly outlined by the government. The only payments that landlords or letting agents can charge to tenants in relation to new contracts are:
- Refundable tenancy deposit capped at no more than 5 weeks’ rent where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above
- A refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent
- Any payments associated with early termination of the tenancy, when requested by the tenant
- Payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy
- All payments in respect of utilities, communication services, TV licence and Council Tax
- Default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement
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