Letting fees ban introduced to Parliament

The Tenants Bill, which had its first reading in the House of Commons yesterday, aims to cap deposits at a cost of six weeks' rent and ban letting fees.

At the moment tenants can end up forking out hundreds of pounds extra, due to fees for referencing, admin costs, licences for pets and other charges.

The plan to ban these rental fees, which the Government claims will save tenants £240 million a year, was first mooted by the Chancellor Philip Hammond in the 2016 Autumn Statement, and was consulted upon last year.

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What will the new rules be?

If the bill is passed by Parliament, as well as banning letting fees and capping tenant deposits, it will:

• Cap holding deposits to reserve a property at no more than one week's rent.

• Cap the charge to change a tenancy at £50 unless the landlord can show it cost more than that.

• Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements, which include publicising fees, should apply to property portals such as Rightmove and Zoopla.

• Introduce a £5,000 fine for an initial breach of the ban and make it a criminal offence, with a maximum penalty of £30,000, if a person has been fined or convicted of the same offence within the last five years.

• Require Trading Standards to enforce the ban and to make provision for tenants to be able to recover wrongly charged fees.

• Prevent landlords taking back possession of their property until they have repaid any unlawfully charged fees.

Under the new rules letting agents and landlords will only be able to charge for rent, deposits, if a tenant requests a change or early termination of their tenancy, for utility and council tax bills and damage or cost caused by a tenant, such as replacing lost key.

What does the Government say?

Housing secretary James Brokenshire said: "This Government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs.

"That's why we're delivering our promise to ban letting fees, alongside other measures to make renting fairer and more transparent."