Letting fees banned in England – your new rights
Landlords and letting agents in England can't charge tenants letting fees on new contracts signed on or after Saturday 1 June. If you're a renter, here are your new rights and what you still need to pay – plus what to do if you're charged an illegal fee.
The long-awaited ban was first mooted in 2016, when Chancellor Philip Hammond said he hoped to bring in new rules "as soon as possible" in his Autumn Statement.
And now from 1 June, tenants can't be charged £100s in extra admin fees, such as set-up or referencing fees, on new tenancies. What's more, if you renew a pre-existing tenancy after 1 June you may even be able to claim part of your deposit back.
Letting fees were already banned in Scotland. While they're still legal in Wales and Northern Ireland, the fees are set to be banned in Wales from September this year.
See our 50+ Renting Tips for more info on renting safely and cheaply.
What are the new letting fees rules in England?
Prior to 1 June, landlords and letting agents could charge tenants who took out a new tenancy a range of fees, including tenancy set-up and check-out fees, referencing fees and credit check fees.
But from 1 June, landlords and their agents can no longer charge any of these fees. The only costs they can pass on to you if you're a tenant are:
- Utilities and council tax if included within the tenancy.
- A refundable deposit capped at five weeks' rent if your annual rent is less than £50,000, or six weeks' rent if annual rent is more than this.
- A refundable holding deposit to reserve the property, capped at one week's rent.
- Changes to the tenancy requested by the tenant, capped at £50 (or "reasonable costs", backed up by written evidence from the landlord or agent).
- Early termination of the tenancy requested by the tenant.
- Defaults by the tenant, such as fines for late rent payments or lost keys. Fines for lost keys must be "reasonable costs", with evidence given in writing by the landlord or agent (you don't have to pay the fee until you've received this evidence).
Fines for late rent payments are capped at an annual percentage rate of 3% above the Bank of England base rate (so right now, that's 3.75%), calculated based on the number of days the payment has been outstanding. They can be charged once a payment's been outstanding for 14 days. So for example, if you owe a late rent payment of £1,000 that's been outstanding for 40 days, you could be charged up to £4.11.
Any other fees are banned, and landlords or agents found charging the fees could be fined £5,000 for a first offence. If they break the rules again within five years, they could be given an unlimited fine.
I'm already in a tenancy – can I still be charged fees?
The fees ban applies to all new tenancies entered into on or after 1 June.
If you signed a tenancy before this which included agreements to pay further fees – for example, check-out fees or tenancy renewal fees – you will still have to pay these up until 31 May 2020.
But from 1 June 2020, any term in a tenancy which requires you to pay fees will no longer be binding, so you won't need to pay them regardless of what your agreement says or when you signed it.
Renewing a tenancy? Check if you can claim cash back
If you renew your tenancy on or after 1 June, the new rules apply – and that means your landlord or agent can only keep a deposit worth up to five weeks' rent – or six weeks' rent if your annual rent is over £50,000.
So if you paid a bigger deposit than that when you first took out your tenancy (prior to 1 June), you should now be able to get the difference back, ie, a partial refund of your deposit.
The landlord or agent should arrange this when you renew your tenancy – if they don't, you can challenge them using the tips below.
What to do if you're wrongly charged a fee
If your landlord or letting agent charges you a fee they aren't supposed to, here's how to fight it:
- First, write to your landlord or agent asking them to return the fee. You can use the template shown on page 78 of the Government's guidance.
- If that doesn't work, you can complain about a letting agent to a redress scheme. All letting agents must belong to a Government-approved redress scheme, which will offer a free and independent dispute resolution service. Details of which redress scheme your letting agent belongs to should be available on the agent's website – or you can ask directly.
- If that doesn't work (or it was a landlord who charged the fee), contact your local authority. The authority can take formal enforcement action against your landlord or letting agent and order them to repay the fee, possibly with interest.
- As a last resort, you can go to the First-Tier Tribunal to recover the payment. The First-Tier Tribunal, which is part of the courts system, can also order a landlord or letting agent to repay fees.
You may have to pay a fee to use this service (although you could be eligible for financial help), so only try this if you're confident you were wrongly charged and you've exhausted the other options.
If you're challenging a banned fee, make sure you have evidence you were asked to pay – for example, emails or letters from your landlord or agent, or notes from conversations.
If you've already paid the fee, keep evidence such as written confirmations from the landlord or agent, receipts or bank statements.
What does the Government say?
Communities Secretary James Brokenshire said: "Tenants will no longer be stung by unreasonable costs from agents or landlords, thanks to the implementation of the Tenant Fees Act.
"This act bans unnecessary letting fees and caps the majority of deposits at five weeks' rent – helping renters keep more of their hard-earned cash. Alongside our recent announcement to scrap no-fault evictions in the sector, this will make renting fairer and more transparent – creating a housing market that works for everyone."