Tenant fees ban set to cost landlords £82.9m
A new ban on tenant fees could push costs of more than £80 million onto landlords, government figures have shown.
The tenant fees bill, which was published on 2 May 2018, includes a ban on all fees charged to tenants apart from rent, deposits, and certain necessary costs. A government impact assessment confirms that “the main costs fall on landlords and letting agents” as a result of the changes, with landlords expected to absorb £82.9 million in the first year. Letting agents also face a greater cost, estimated at £157.1 million for the same period of time.
Aside from rent and deposits, landlords and letting agents will only be able to charge tenants for:
- a change or early termination of a tenancy when requested by the tenant
- utilities, communication services and council tax
- a default by the tenant, such as replacing a lost key.
As well as banning fees, the bill will introduce a cap on holding deposits of up to one week’s rent, and security deposits at no more than six weeks’ rent
. Fees for a change to the tenancy will also be capped at £50, unless the landlord can prove the change incurred greater costs.
Those in breach of the ban could face a fine of £5,000 for a first offence, with further offences within five years resulting in either penalties of up to £30,000 or prosecution. The new rules are due to come into force next year as the measures pass through parliament.
Get in touch to discuss your property.