By Fiona Moore, for ExpatBriefing.com 15 November, 2017
The cost of temporarily renting property in the UK is to likely drop under legislation tabled before the UK’s parliament that would prevent tenants from being charged letting fees.
The change will be particularly beneficial for non-UK residents living temporarily who may be unfamiliar with the rules surrounding letting property in the UK.
Announcing its plans, the UK Government said evidence shows the level of fees charged are often not clearly or consistently explained, leaving many tenants unaware of the true costs of renting a property. “This latest action will help improve transparency, affordability and competition in the private rental market. It will also prevent agents from double charging both tenants and landlords for the same services,” it said.
Communities Secretary Sajid Javid said: “This government is determined to make sure the housing market works for everyone. Tenants should no longer be hit by surprise fees they may struggle to afford and should only be required to pay their rent alongside a refundable deposit. We’re delivering on our promise to ban letting agent fees, alongside other measures to make renting fairer and increase protection for renters. As part of wider plans to improve the rental market, government has already introduced measures that crack down on the small minority of rogue landlords that shirk their responsibilities.
The draft Tenant Fees Bill will:
- Cap holding deposits at no more than one week’s rent and security deposits at no more than 6 weeks’ rent. The draft bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant.
- Create a civil offence with a fine of GBP5,000 for an initial breach of the ban on letting agent fees and creating a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Civil penalties of up to £30,000 can be issued as an alternative to prosecution.
- Require Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees.
- Appoint a lead enforcement authority in the lettings sector.
- Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla.
More than 9 out of 10 tenants who responded to the government consultation backed the action to ban letting agent fees, with 7 out of 10 of them saying these fees affected their ability to move into a new rented property.