The Tenant Fees Act 2019 | What You Need to Know

What is the Tenant Fees Act 2019?

The Tenant Fees Act bans most letting fees and caps tenancy deposits paid by tenants in the private rented sector in England.

The ban on tenant fees applies to new or renewed tenancy agreements signed on or after 1 June 2019.

The government guidance on the Act for tenants, landlords and letting agents helps explain how this legislation affects them. You might also find the ‘How to Rent’ and ‘How to Let’ guides useful.

The aim of the Act is to reduce the costs that tenants can face at the outset, and throughout, a tenancy. Tenants will be able to see, at a glance, what a given property will cost them in the advertised rent with no hidden costs.

The party that contracts the service – the landlord – will be responsible for paying for that service, helping ensure the fees charged reflect the real economic value of the services provided and sharpen letting agents’ incentive to compete for landlords’ business.

Local enforcement authorities have primary responsibility for enforcing this legislation. The Tenant Fees Act created an independent lead enforcement authority to provide advice and information to local authorities on the Act. Bristol city council has been appointed as the lead enforcement authority for lettings.

What are the new fees?

From 1 June 2019, the only payments that landlords or letting agents can charge to tenants for new contracts are:

• rent
• a refundable tenancy deposit capped at no more than 5 weeks’ rent where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above
• a refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent
• payments associated with early termination of the tenancy, when requested by the tenant
• payments in respect of utilities, communication services, TV licence and Council Tax
• a default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement

A Word from The Good Estate Agent

Whilst this is a big change for the industry this will simplify the process for tenants. Ultimately both letting agents and landlords will have the same costs and the income will need to be replaced. It is estimated that rents will go up on average £103 per year per tenant in order to counteract this rise. (Rob Bryer, Managing Director)

Further information regarding the Tenant Fees Act 2019, including rates charged to both landlords and tenants can be found here. 

Note: All information is taken from the UK Government website.