10 June 2019
1 June 2019 saw the introduction of a new law banning the charging of ‘unfair’ fees by letting agents on tenants predominantly on the commencing of a new tenancy. Tenants will now no longer face charges being levied for arranging viewings, performing credit checks, carrying out reference checks and setting up new tenancies.
This change was first announced back in November 2016 but has only just come into legal force. A similar ban has been in force in Scotland since 2012 and Wales will introduce its own rules in September 2019.
Tenants can and no doubt will still be charged for the following:
- The first month’s rent and deposit in advance (the deposit being generally five weeks’ worth of rent);
- Holding deposits (capped at one week’s rent);
- Lost key replacements, at cost or as close to cost to the landlord themselves;
- Penalties based on outstanding rents of more than 14 days, which is capped at 3% above the Bank of England base rate;
- Fees if a tenant requests a change to the tenancy or if a tenant wishes to leave the contract early.
All in all, this represents a vast reduction on what letting agencies could and did charge for previously, so this could mean agencies increasing their charges to landlords to cover these costs. This, in turn, could lead to increased rents being charged by the landlords, but only time will tell.
What this will mean is that letting agents and landlords alike will still require advice however they individually decide to embrace the new laws, so please feel free to contact me or your local UHY representative to discuss your options.
Alternatively, visit our property sector page to see how our expertise can help you.