A new draft bill has been introduced to Parliament today, outlining its approach to banning letting fees in England.
The draft Tenant Fees Bill will place a cap on holding deposits at no more than one week’s rent, whilst security deposits will be capped at no more than six weeks’ rent. Plus, the draft bill will:
- require Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees;
- 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;
- 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 Zoopla and Rightmove.
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”.
The Government website says that these schemes ensure greater financial protection for landlords and tenants, giving them complete confidence that their money is safe when it is with their agent and they can be compensated if all or part of their money is not repaid.
The draft bill takes into account responses from a public consultation of over 4,700 individuals and representative bodies. More than nine out of 10 tenants who responded to the Government consultation supported the action to ban letting agent fees, with seven out of 10 of them saying these fees affected their ability to move into a new rented property.
The Government hopes that the move will help to improve transparency, affordability and competition in the private rental market and stop lettings agents from double charging both tenants and landlords for the same services.
Letting fees are already banned in Scotland but not yet in Wales.