The government has announced a ban on fees charged to tenants. What does this mean to you as a tenant or landlord?

Agents and customers are currently unclear as to what the law will be and when it will be brought in. It may well take 18 months for legislation to come into effect.

The Good Estate Agent has pledged to respect this decision. We will ensure that there are no detrimental effects for tenants or landlords. We believe this is a positive move that will make things easier for tenants. It will also level the playing field for agents and make things more transparent for landlords.

But what are the potential positives and negatives that could come out of this?


You won’t need to come up with an application fee to apply for a property. This is of course a positive thing but it does bring some negatives. Somebody will have to pay for the costs involved and it is possible and likely that some agents will pass this cost on to the landlord. If the landlord has additional costs the most obvious action for them is to increase the rent. Ultimately this could make it more expensive for tenants in the long run. This is what happened in Scotland.

Less security: Often the tenant application fee also acts as a holding fee to secure the property whilst the referencing goes through. If this is not paid the landlord or agent may not feel as comfortable and may mean they accept another tenant who passes the referencing first. Less security for the tenant and the landlord. Agents and landlords may have a solution to this as has been adopted in Scotland.  You pay a holding deposit instead but now you are back in the position you were to begin with having to find a fee to move. The advantage here is this would be deducted off the initial rent or deposit you have to pay.


It is likely that agents will have to pass these costs on to landlords. After all we are in business and have to make money to survive. The reduction of these fees is a significant loss of business and decisions will need to be made. Some staff reductions could be made meaning a lower level of service.

Landlords and letting agents widely believe that part of the referencing process is the ability to pay an application fee. If a tenant cannot come up with a spare £150 then what happens if they have a hard month? It shows an ability to cater for additional expenses.

This decision will have wide implications for the industry and is another attack on landlords. If the government were really interested in making the house buying process easier then why do they not look at banning mortgage application fees which are often in excess of £1000, cutting stamp duty and making the house buying process easier? It appears they are going for the easy vote winning option. It is a shame as most landlords provide a very valuable service for the community filling a gap left behind by the government’s inability to address housing needs.