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Letting fees ban set to come into force on 1 June 2019

The introduction of a ban on fees charged by landlords and letting agents look set to finally come into force on 1 June this year, the government announced yesterday.

Following yesterday’s third reading in the House of Lords, the Tenant Fees Bill is likely to receive Royal Assent in the coming weeks.

Speaking to the Lords, Lord Bourne of Aberystwyth said: “We need to enable agents and landlords following Royal Assent to become compliant, but we intend for the provisions to come into force on June 1st 2019.

“This would mean the ban on lettings fees would apply to all tenancies signed after this date.”

The new law will not just mean a ban on letting fees, but also the majority of other upfront fees payable by tenants to rent a property in England.

There will also be a cap on the amount of refundable security deposit a tenant would be required to pay to the value of five weeks’ rent as well as a cap on the amount of holding deposit a tenant will be required to put down to secure a property to the value of one week’s rent.

The government believes that the Bill will make renting properties in England fairer and more affordable for tenants by reducing the costs at the outset of a tenancy, at the same time as improving transparency and competition in the private rental market.

David Cox, Chief Executive, ARLA Propertymark, said: “With the Tenant Fees Bill completing its passage through the House of Lords this afternoon, it appears the Tenant Fees ban will come into force on 1st June 2019; subject to parliamentary scrutiny in the House of Commons.

“This now gives agents the legal certainty they need to prepare for a post tenant fees ban world. To learn about the intricacies of the legislation, we encourage agents to come to our regional meetings over the next few weeks and of course our annual Conference, where ARLA Propertymark will be doing everything it can to help agents plan and prepare for the introduction of the Bill.”

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    But who is going to pay? these fees aren't going to go away, to start with us the landlords, but the extra cost will soon be passed back to the tenant by means of increased rent, and lets face it there is no shortage of tenants out there looking for a home.

  • Paul Barrett

    There only needs to be introduction of the Tenant Referencing Passport so that a tenant only needs one passport which can then be touted around as many LL and LA as they want.
    A TRP with LRS costs £40 and is valid for 3 months
    No other referencing is required.
    If the TRP qualiies the tenant prospect for RGI those tenant applicants will be the cream of the crop.
    There wont be anymore delays.So all a LA will need to say to any tenant prospect is that they will need to purchase their own TRP.
    If they dont want to then they simply wont be considered.
    Note the LA or LL is NOT requiring the tenant prospect to obtain their own TRP they are simply stating that without one the LA or LL simply wouldn't consider them for any tenancy.
    If the tenant didn't wish to be considered then they wont bother with obtaining their own TRP.
    It is completely up to the tenant if they wish to be considered nobody can force them to be so.
    It will the tenants choice!!

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    good news or not, it is warning that some agents' fee is too high and greedy. As landlords, we never charge introduction fee, never ask tenancy deposit more than a month rent, we don't abuse the business opportunities and we are very customer service oriented, in brief. Business is getting tougher and tougher, if the price value did not match the service and quality of the product provided. You will be out soon. This is a very good message to those who are bully and think they know it all but neglect both landlords' and tenants' right in the way how they manage their business.

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    Of more concern to me is the limiting of security deposits. Tenants who do not have a great credit rating can often now rent by paying greater deposits as security. If this option is taken away it will be much harder for such people to find accommodation. As the comment above says, there is no shortage of tenants so landlords can also afford to be particular

  • Paul Barrett

    Interesting how differing some LL do business.
    I always charge 2 months rent as a deposit and will continue to do so though slightly differently when the 5 week deposit ban comes into force.
    I require 1 months rent in advance
    I charge nothing for an AST or inventory.
    I don't charge any admin fee for mydeposits registration
    The tenant has to obtain their TRP or I won't consider them.
    So basically to be considered and to eventually become a tenant of mine costs them £40.
    Yes the tenant needs a 2 month deposit but no more than that.
    This must be considered a very good deal from the tenants perspective.
    Of course I self manage.
    So perhaps with my lower costs and charging structure I might be considered to be a better propect as a LL than those LL that choose to use a LA.
    Will perhaps those LL who self manage obtain the best tenants leaving the dross to the LA?
    We shall see!!

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    Good on you Paul. The best way.

    Paul Barrett

    I believe that many LL will consider their position in light of all that is occurring and conclude that self management gives them the ability to have the most effective offer for tenants.

    If LA believe they can just pass the tenant fees to the LL in higher management costs they are deluding themselves.
    The internet is a major disruptor to the soon to be dead current High St LA business model.
    LA will need to come up with a far more compelling offer for LL and tenants alike if they wish tenants and LL to use them.
    Social media is where propective tenants are increasingly going.
    LA will have to manage on vastly reduced fee income and will have to accept they will not be able to simply pass on the tenant fee loss for higher LL charges.
    LL are already having to increase rents to cover for all the bonkers policies councils and Govt are introducing.
    To imagine there is any additional headroom for LL to increase rents sufficient to pay for increased LA charges to make up for their lost tenant fee income is for the birds.
    A Local LA I know well advised me that he faces losing about £30000 in tenant fee income plus he has just been hit for much higher business rates for a new office.
    This potential loss means he will need to make about 2 or possibly 3 staff members redundant.
    He simply could not afford to pass on the costs of tenant referencing etc to a LL many of whom are choosing to sell up.
    Indeed the last time I spoke to him he advised he was very busy with valuations for LL seeking to exit the PRS as a consequence of all the things known about with S24 being the main reason.
    So I would suggest a LA position is not a happy one.
    I can only see LA consolidation as a viable response to managing LA income.
    Do we really need 5 LA in close proximity to eachother when 1 will suffice!!?

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    Peoples, and I mean good hard working hard earning peoples who have purchased their properties either with the help of banks or lenders or paid cash, using their own hard earned money.
    Us peoples who employe Gas Safe person, Elec qualified persons, Inventory qualified persons, cleaning persons who clean, use shops that provide our quality beds for our tenants to sleep in, maybe first rate firms who supply are White goods.
    Then our time on being on call 24/7 365 days of the year, no days off, even can be spoken to on a christmas day a bank holiday our holidays abroad us humans not a machine that takes a message because its a Saturday afternoon or a sunday but us persons always available for our tenants, the ones who always pay their rent on time, will always be available to let our maintenance man in to carry out a repair the rent paying on time tenant requested. The tenant who looks after Our property you know, us the persons who have worked hard to provide homes for other persons to live in either on their own or with a partner or with their family.
    We don't live on Fines, Council Tax, Licence Fees and provide substandard housing, the type that if there is a fire dozens die. We apply our own rules and yet also we have to work with the stupid silly trust not tricks rules the council impose on us professional yet don't abide by them themselves.
    Might mean we peoples who have worked hard who take a pride in our hard earned properties who carry out our own Inspections every 2 or 3 months who listen to our tenants, start selling up and moving into Commercial properties where you will be dealing with like wise peoples who work hard to get what they want.
    Let the Council, Shelter, Charities etc start providing Homes for the people who need and want to rent because we run our rental properties like a business a business which has to make a profit in order to continue putting roof over tenants heads, those mentioned have to start learning again like they did in the 50s and 60 and 70s otherwise the homeless will increase.
    Like Brexit, we need to get out and get out now, No deal as we have already paid over £40 billion over the past 39 years. Start again.

    Paul Barrett

    I consider your sentiments to be very wise.
    You have correctly identified that the whole PRS cycle will need to occur again.
    History is being ignored.
    Unfortunately the lessons of history will have to be learned again.
    So the PRS will have to reduce in size and capacity.
    Inevitably this means the PRS will lose the leveraged LL.
    It will return as it once was to the rich people.
    There are simply insufficient rich people to support the rental properties required.
    The last time this situation was the case there were reasonable quantities of social housing and there wasn't MASS UNCONTROLLED IMMIGRATION.
    These two factors combined with forcing leveraged LL out of business means that the current homeless situation is just 1% of what homelessness will eventually become.
    A possible salvation for tenants with a rapidly reducing PRS is that there will be a massive reduction in immigration.
    As it stands currently there does not seem any sign of this.
    But leveraged LL need to be in no doubt that they are coming for you.
    Those LL that have converted to Ltd companies should be under no illusions that they have escaped S24.
    Govt will come after all leveraged LL no matter how they have constructed their business.
    Even unleveraged LL face the prospect of reductions in income as a consequence of rent controls.
    Make no mistake about it the PRS is being assailed from all sides.
    Those leveraged LL especially need to consider their position.
    It is far from secure.
    It is clear Govt has no interest in learning historical lessons.
    Therefore history will return to repeat itself.
    Leveraged LL need to understand this and behave accordingly.
    Unfortunately for tenants LL don't need to bother to be LL.
    Tenants however desperately need LL to be LL.
    There are simply not enough cash rich LL to replace those leveraged LL that are forced put of business by bonkers Govt and Council anti-PRS policies.
    Times are going to get a lot worse for tenants in the next few years.
    They will be scrabbling for and paying a lot more for the considerably reduced Rental stock that will be available.

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    Well that about sums it up, at the end of the day it will be the tenants that suffer and local councils will have a big increase of homeless people on their patch, these uni educated politicians and civil servants are as thick as sssss--t


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