Tenant Fees Act (2019): What Landlords Need to Know

The Tenant Fees Act came into force on 1st June 2019.  At the centre of the new rules is a ban on tenant fees, including admin and agency fees.

From 1st June, all tenant payments will be banned by default unless the Act specifically permits them. The permitted list does not include fees such as referencing and inventories. 

Here’s everything a landlord needs to know about the Tenant Fees Act (2019).

Summary of Tenant Fee Ban

  • Limit tenancy deposits to five weeks’ rent
  • Limit holding deposits to one week’s rent
  • Ban any other payments (except contractual default penalties)
  • Fines of £5,000 for first offence (civil)
  • Fines of £30,000 for second offence (criminal)

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What’s in the Act?

Here are the key new rules contained in the Act.

1. All Payments Prohibited Except Rent, Deposits and Three Exceptions

Landlords or their agents will no longer be allowed to charge tenants for anything except: the rent, the tenancy deposit and a holding deposit (more on these below).

This means you will no longer be allowed to ask tenants to cover the cost of their own referencing. You also won’t be able to charge check-in, inventory or admin fees.

2. Three Fees Are Exempt

The only three exceptions are for contract amendments and two kinds of ‘default’ fees. These are fees you can charge when the tenant breaks the tenancy agreement. You will have to write these clauses into your contract to be able to charge tenants these fees while the tenancy is in progress.

(a) Late Rent Fees

You will be able to charge fees for rent payments that are over 2 weeks late. The fees can be up to 3% plus the Bank of England base interest rate. Because this is an annual interest rate, you will have to calculate the amount of pro rata interest accrued on the outstanding rent.

Here’s an example:

The tenant is 60 days late for one £1,500 rent payment.

The base rate of interest is currently 0.75%, so you can chase the tenant for the outstanding rent plus a fee of 3.75% of outstanding rent, pro rata for the 60 days.

3.75% of £1,500 is £56.25.

60 days is 60/365 of the yearly rate. Therefore, to get the pro rata amount, we multiply £56.25 by 60/365, which is £9.25.

Many of you will be thinking that £9.25 is not a big fine for being two months late with the rent. This is quite a small fee. You will also not be able to charge for chasing the rent, i.e. for sending letters.

It’s debatable, however, whether late fees have ever been effective at making tenants pay on time, and if the threat of eviction is a much better deterrent. Landlord will of course still be able to serve Section 8 notices for late payment of rent.

(b) Lost Keys

You will also still be able to charge tenants for losing their keys (or other security device if your property is high-tech). But you will only be able to charge a reasonable amount for which you can provide evidence of the cost to you.

For example, you will be able to charge £5 to replace a lost key if you can produce a receipt for £5 for getting a new key cut.

Remember, both default fees will need to be included in the tenancy agreement for you to be able to charge them, and previous rules about fair clauses will still apply.

(c) Changes to Tenancy

Landlords can charge up to £50 for making changes to the terms of the tenancy. For example, adding a new tenant to the tenancy or allowing a pet.

Landlord can charge more than £50 if they are able to demonstrate their costs exceeded £50, but it is expected that this will not happen often.

Crucially, this exception does not apply to renewals or changes to the length of the tenancy!

3. Cap on Tenancy Deposits

Tenancy deposits, also called security deposits, are to be limited to five weeks’ rent for annuals rents under £50,000.

It was originally going to be six weeks, but then the Government seemed to meet those campaigning for four weeks halfway. We understand there were some Parliamentary shenanigans that led to the strange number of five weeks’ rent…

Landlords will note that this is hardly more than a month’s rent, meaning tenants could in theory not pay the last month’s rent, allowing the landlord to deduct it from their deposit. At that point there would only be a small amount of the deposit left to cover any damage to the property.

For properties whose annual rent is £50,000 or more, tenancy deposits will be capped at six weeks’ rent. 

Not sure what your maximum deposit is? You can check your maximum tenancy deposit using our new deposit calculator

In practice, deposits have never been uncapped. They have always been kept below two months’ rent due to the fear of the tenancy becoming a premium tenancy.

4. Cap on Holding Deposits

Likewise, holding deposits will be limited to one week’s rent.

This is a big change, since most holding deposits are currently much more than a week’s rent. An OpenRent poll recently found that 47% of tenants have paid a holding deposit of over £750 — much more than the average weekly rent for a UK property.

5. New Rules on Holding Deposits

The Act includes new rules about how holding deposits must be treated.

The holding deposit must be returned to the tenant: either in payment back to the tenant, or being put towards the first rental payment, or the security deposit.

There are some exceptions. In these cases the landlord can keep the holding deposits:

  • The tenant withdraws
  • The tenant doesn’t take all reasonable steps to enter the tenancy
  • The tenant fails a right to rent check
  • The tenant provides misleading information which materially affects their suitability to rent the property

If that last one sounds a little vague to you, then you’re not alone. You can read the exact wording here in paragraph 9 of the Tenant Fees Act.

6. Repayment of Holding Deposits

Landlords will only be able to hold the holding deposit for 15 days unless another ‘deadline’ date is agreed in writing.

After the deadline, the holding deposit must be repaid within 7 days according to the above rules (see 5).

The holding deposit can be repaid to the tenant, or it can be put towards the rent or tenancy deposit.

What Are the Penalties to Landlords Who Charge Tenant Fees?

Landlord (or agents) who charge illegal fees will face paying huge fines.

The first offence would be a civil offence, with a fine of £5,000.

If the offence is repeated within five years, there would be either a criminal offence or a fine of £30,000.

There are also plans to help tenants recoup any illegal fees they paid from the landlord (or agent).

Local Trading Standards organisations will enforce the ban.

Do You Support the Ban? Join the Debate here!

My Current Deposit is More than Five  Weeks’ Rent: Do I Need to Return Part of the Tenancy Deposit after 1st June 2019? 

Yes if you renew the tenancy, you will need to make sure any tenancy deposit does not exceed the maximum amount of five weeks’ rent. 

The rules will apply to all existing tenancies from 1st June 2020. So If this tenancy runs past 1st June 2020, then you will need to make sure the tenancy deposit is less than the maximum five weeks’ rent before that date. 

You can do this by returning the excess to the tenant. 

Can I Still Charge Bills as Part of the Rent?

Yes. You can still include bills in the rent for the following utilities and services:

  • Council tax
  • Utilities, e.g. gas, water, electricity
  • Television license
  • Communication services (e.g. broadband)

More changes are coming. Click here to subscribe to email updates.

208 Replies to “Tenant Fees Act (2019): What Landlords Need to Know”

  1. Its about time the fees charged are a scandal .many seeking accomodation have enough trouble getting the deposit as it is

    1. changing tenants takes a lot of time and effort. advertising, viewing, vetting prospective tenants, getting the property ready, inventory checks, clarifications with councils and suppliers of utilities etc. for a long term tenant the charges even out, for short term tenants it is significant extra expense. every year landlords have more hoops to jump thru. the private rental stock is decreasing and rents are going up

      1. I am a landlord and have been using an agent recently due to lack of ability to carry out viewings, I found out only by default that the agent is charging Tennant’s £270 in fees, I could not believe it and am embrrassed so much so I have withdrawn from using them so my next Tennant will not have to pay that. It’s not hard to rent a property out, it’s money for old rope in my head, just takes a little effort. No wonder we have issues with homelessness in our country when we are asking for such fees on top of deposits and rent upfront, people have no idea what it is like for individuals who don’t have a support mechanism to help them in such situations. I am very pleased with this new legislation

        1. You have an honest and humanistic attitude and I praise your business practice and ethos. Thank you from the many of us house hunting.

        2. If you think letting a property is money for old rope, then you are not doing it properly and you’re exactly the sort of landlord that needs an decent agent before you get yourself in trouble.

          1. Agree, landlords are suffocated with requirements and 170 laws – hence a lot landlords are quitting it. Let the government build and manage the nation housing crisis.

          2. ‘Jay’
            Just because you have obviously had issues with tenancies, doesn’t mean every landlord does.
            Was it you perhaps that caused the issues?
            Is your attitude not fit for this line of business?
            Are you and other landlords like you, the very reason why these new laws came about?

        3. I am a landlord of 9 years, and I totally agree. Tenants should not be charged any extra. They find it difficult as it is! I hate agencies and rogue landlords that are out there. Agreed, abit for work for me, but inturn should lead to more trusting landlord/tenant relationship.

        4. I wish more landlords felt like this instead of making it impossible to get private rented. I looked into a house and for deposit and fees for us all it was going to cost nearly £1,800 as got adult children living with me still and at time had a dog so that was another expense of £100 its a total rip off. So glad there are good nice people like yourself

        5. You say it is not ‘hard’ and yet I doubt you have worked in am Letting Agency…To rent 1 property it is indeed time consuming remember it’s not always the first tenant that rents the property, there is also legislation to comply with, credit checks etc the fees are sometimes justified ie Inventory Checks that will protect both Landlords and Tenants, however I do agree that a lot of companies abuse this. If the tenant will not be charged the necessary costs it will be the landlords who will have to pay it in the end. I think the fees should have been capped and not banned. P.S I’m not a Letting Agent

          1. I am a letting agent and totally agree the fees should have been capped not banned. Any cost now will have to be paid for by the landlords which will ultimately filter down to the rent.

          1. Can any one tell me why this ban is only on AST, we have been charged £1000 more than we should have simply because they have changed the name of the tenancy agreement to a common law tenancy and this is on an MOD property so therefore its a government property is this correct????

          2. Yes you’re right, it will likely end up filtering down to the rental price, but at least everything becomes clear to both the tenant and the landlord. Often fees are hidden outside of the tenancy agreement, such as references checks for someone coming on to an exciting lease. This Act provides what I consider quite rigid guidelines and puts the onus onto the agency/landlord to price their rent right and no clip the ticket wherever they can along the way. People need to understand that the cost of a change of name, reference check or end of Tennacy inventory check is what in business is called the ‘cost of doing business’. If you can’t price your rental business right that’s the agencies/landlords problem. FYI I’m both a landlord and a tenant.

      2. But that’s your problem. You wanted to be a landlord… well, everything has a price. At last, we won’t be paying it!

        1. Not all of us, a lot of us have become ‘accidental landlords’ out of necessity because of jobs – I have to rent too, and circumstance don’t allow me to give it up sadly. Don’t tell me you’d give up your foot on the property ladder given the chance to keep it.

          1. Totally agree, my husband and I became ‘accidental landlords’ as due to complicated circumstances we couldn’t move up the housing ladder and would have lost the house we had offered on. its a huge headache for us and the tax is high. I wish we could have sold to the lovely guy who wanted to buy from us and have this property off our hands…now the tenants’ costs are being filtered down to us by greedy agencies. Along with Selective Licensing, it seems all the ‘rights’ are being given to the tenants but decent hardworking landlords have no legal protection whatsoever against having to absorb all these extra fees. Some will increase rents just to claw back the costs, we don’t wish to do that to our tenants.

        2. Choosing to be a landlord is profession just like any other thing people do. They all have negative or positive issues. If u feel this way about landlords, perhaps you should not use the private sector.

        3. You will end up paying for it in increases of rent.
          When properties become scarce because landlords stop letting, or they charges a higher rent, you have automatically increased cost of letting :
          Example :
          Old case
          6x £ 200pw deposit is £1200 for a monthly rent of £800 pm

          New case
          5x 240pw deposit is £1200 for a monthly rent of £960 pm

          Rents go up

          1. Hi Barry, rents don’t rise in line with landlords’ costs! They rise in line with what tenants can afford. If it was possible for tenants to be paying an extra £160 pcm, then landlords would already be charging it.

        4. Sam is correct in that Openrent landlords are used to self managing and charging only for referencing. The fees had to go and it’s a good thing. The other changes further tighten the noose on landlords and that isn’t good for anybody. I am in the process of switching my houses to HMOs, because it’s now less risky than letting to families. I have places sitting empty for longer periods because govt changes have again, driven up risk, meaning my criteria has tightened. If I sell, it’s to renters who can afford to buy, which doesn’t help those who can’t.

        5. Kate, that is a bit of an ignorant statement. We may choose to be landlords however the goalposts keep moving and once you are running a business it is not that easy to change or get out of. I believe that costs should be fair, that way everyone pays a little and creates stability. We have a number of shared houses which have been working fine albeit with a lot of management and are time consuming. With the new ban our expenses have gone up significantly as there is high turnover in these type of properties. We went into property to provide good accommodation we could be proud of, have the opportunity to run our own business and have something for the future. We are not all in this to make millions and if someone does while at the same time being a good landlord – then good for them! There is a housing shortage and the Government aren’t dealing with it. They need the private sector but at the same time we are easy scapegoats to target for extra revenue. Regulation is good but please don’t blame landlords…

      3. I understand your feelings completely because I too am a Landlord, but my view on the additional costs including ‘hoops’ to jump through has more to do with the type of tenant you seek and the kind of landlord you want to be. My tenants are fantastic, they’re respectful, pay on time, respond to communications and they endeavour to look after my properties without having to be asked. Therefore, if I need to pay a little more in tax, or reduce my deposit or lose some rights under article 21, then so be it, it’s all part and parcel of making a living work for everyone. I haven’t increased my rent for 5 years on all of my properties because my profit is sufficient. Greed is an ugly part of the property market, and whilst I do sincerely sympathise with landlords that suffer some ghastly tenants, I equally loathe those landlords that ‘take, take, take’ with no moral guidance. Notwithstanding having 2 children previously at university renting and now renting in a City with very slack landlords, it only gathers more resentment to hear landlords moan about their hardships.

        1. Hi Karina , I am with a private landlord but my question is to you , does a new tenant still need to pay a “bond” or rent in advance” or has that been scrapped now?

          1. Hi Wendy, yes tenants can still be asked for a bond aka tenancy deposit. And they can still pay rent in advance, be in the first month’s rent us six months’ rent.

        2. All that has been happening is potential landlords that have been buying cheap houses at auction (watching too much tv) then expecting to make a killing as they could charge whatever fees they wanted, didn’t need much advertising(plenty of desperate tenants), a lick of paint, then go and order their Mercedes.
          Well it’s tough titty, now they will have to run their properties as a tightly costed business and not a free profit run.

    2. The fees will be charged indirectly by rent increases to the tenant.
      A landlord, acting as an agent, would place to the front of a queue those tenants who self-referenced, in other words, at their own cost. That way the landlord isn’t receiving the fee.
      An inventory in or out fee is payable by both the tenant and landlord, and protects both.
      Having said that, I never charge my tenants fees other than the inventory in (at cost), and a reference fee (£15), also at cost.
      However, under the new legislation called “hunt the landlord”, either most will sell up or move the fees over as a tax deduction. Which is not such a bad idea, actually.

      1. Hi John,

        Fees won’t be indirectly charged by OpenRent landlords, because OpenRent don’t have an average of £300 in banned tenant fees to pass on to landlords.

        Sam

      2. John,
        I’m surprised no landlord has been deducting these fees against tax anyway, it’s a business!!!
        Perhaps some have been charging fees AND claiming them back..(tut)
        Perhaps a lot on here, are not registered for tax (oops)
        It’s a fab new law, long overdue and will both help tenants enormously and get landlords to think properly about running their business

    3. It is really about time. I mean landlords and estate agents ended up taking this to an extortionate level. It is really about time

    4. I’ve got 2 rental properties and I’ve never charged fees . I like to let my properties myself and get to know the people I rent to . I’ve only had two tenants in ten years in one house . The only thing I charge for is credit check (at cost) and I’m disappointed I have to pay this as I’m worried it will increase time wasters .

    5. It makes no difference. I have had to put my monthly rent up because of this!!! Completely pointless new legislation here. More of a good marketing campaign from the government.

  2. Its about time i just lost £650 for referencing and agents fees for a property wanted to rent but my landlord regused to give reference on me just because he was on abroad since when did Northern Ireland became out of this world.
    I have no rental arrears and am still the one that lost.
    Landlords should be referenced too just as tenants are.

    1. As a landlord. It can take me months to get you out of my property when you decide to not pay rent. Keep making idiotic demands. Start looking for a tent

      1. You are the type that has would have his property trashed and poo smeared over the walls because of your attitude.. start renting out tents!

        1. the part with the poo smeared on the wall says more about the ret***ed tenant than it does about a man who just wants a rent to be payed on time.

          1. I’m thinking of renting to currently non-Uk friends of friends (who will be confirming UK citizenship via grandparents) They work freelance internationally and have never lived in the UK and don’t have UK based relatives. If I charge 6 or 12 months advance rent will I be breaching the new regulations (obviously 5 weeks deposit to be held separately)

        2. As an accidental landlord with one property your comment feels really unfair.
          When a tenant isn’t paying rent and you know that they are trashing the property while you try to get them to leave, it’s stressful and heartbreaking when you finally get back into the place and realise that you’re going to have to spend hundreds, possibly thousands to get it habitable again. Not all landlords are wealthy or have this sort of money lying around. Please don’t tar all with the same brush.

      2. I completely agree with you.
        As a landlord I don’t think that tenants appreciate the cost in maintaining a property for them to live in. It isn’t all profit.
        I had a tenant who refused to pay rent for 3 months. I had to cover the mortgage for this amount of time. They then disappeared overnight leaving to property in an awful state, and for what?
        You think that you are helping people, keeping them off of the street…most are not entitled to social housing and this is how they repay you!
        I agree get a tent!!

        1. You’re a dick. You own a house and need tenants to live in it to make you money. Why don’t you think about the journey a tenant has to go on rather than your own situation. You should be ashamed of yourself.

      3. You loosing not a tenant. There’s so many houses to choose from. If you will be charging us so much, you won’t get anyone who would want to live in your house. Tenant isn’t a money machine!

        1. If everyone who’s renting thinks it is that easy to buy and maintain a property, why don’t they buy one?
          I rent mine myself , zero charges. But it is a hell of a lot of work to find the right person. Been doing it for 15 years. But still find a few assy tenants.
          But there are asshole landlords. Agree with the charges dropped. But landlords need protection too.

    2. As a private landlord, it never ceases to amaze me, the level of fees that prospective tenants are expected to pay. If a landlord employs an agent to source tenants and manage a property, then this is a contractual agreement between the landlord and the agent. It is not fair to expect the tenant to bear additional cost if the landlord chooses to contract out property advertising, vetting of tenants, rent collection and maintenance etc. I do think, however, that a credit reference check is necessary in order to establish tenants ability to pay and it would not seem unreasonable for a landlord to facilitate this, charging for the service at cost.

      1. Tenants should not pay. Full stop.
        Landlords however have to understand that they have been the beneficiary and their fees have dropped dramatically over the last 20 years. There is a complete lack of understanding of the work that an Agent does, not only to secure a Tenant, but also to ensure compliance, due diligence & legal security.
        Landlords must accept they will have to pay Agents (reputable & licenced) more for this level of knowledge and competence.
        It is my view that private Landlord’s must fulfill the same compliance and insurance obligations, as Agents should.
        Government’s failure to understand this will set the Private Rented Sector back decades in terms of financial compliance and Tenant safety.
        The Tenant Fees Ban is so short sighted it’s untrue. A rethink and some long term solutions need to be applied.

        1. Hi James, thanks for your comment!

          We think it’s very easy for landlords to find a tenant and be compliant.

          Compliance just means hitting the simple points on this short list. And as for finding a tenant, 50% of landlords don’t even use a letting agent.

          When it comes to tenant safety, it’s hard to envisage it getting any worse, with a third of properties already failing health and safety standards.

          1. Hi OpenRent,

            I entirely agree with you. Ever since I stopped using agents to let my properties and started using your outstanding service, I’ve found excellent tenants and always make sure they are safe, well accommodated and happy. I take my responsibilities as a professional landlord very seriously, which has been helped hugely by the OpenRent vision. I found agents to be incompetent, lazy, and ripped off tenants with ridiculous charges.

          2. Thanks Jake, that’s really great to hear! I’ll pass your comments on to the team 🙂

          3. I agree and disagree with comments in here ,I am a long standing tenant to my home for 6+ years , I have never missed my rent and keep the house in tip top shape , minimal repairs I take control of my self as not to trouble my landlord , structural etc is the landlords responsibility, just late I am having massive trouble with black mould and nothing is getting done about it , the area is full of druggies and has gone to the dogs , over the last few months I have felt trapped because being of ill health and disabilities I couldn’t work and have claim UC the amount of landlords that refuse to let to people on UC / DSS is disgusting we are not all house wreckers etc 99% of us are responsible people plus you need at least £1000 extra just to pay fees to the agents before you pay your deposit and rent up front …. so I for one agree the fees should be scrapped as more people will be able to move from houses that are in need of repairs etc stop us from feeling trapped

        2. Sorry James, in my experience, there isn’t alot of competence involved when it comes to letting agencies, unfortunately your working in an industry that has gotten money for old rope for a long time, it’s not difficult, I’m a landlord, I simply cannot visualise where your perspective is at, it’s a shame really, as I really want to see the best, but I have struggled to find a high Street agent with any integrity of professionalism ……a shop front and a receptionist is pretty much all you get there…

        3. Does anybody know if the tenant will be charged for the arranging of deposit difference to be returned (bringing it to 5 weeks). If so, can we opt to leave the deposit as it is (ie 6 weeks)?

          1. I’m not sure what you mean by ‘being charged for the the arranging of the deposit difference to be returned’?

        4. James,
          Most new landlords who go it alone without agency ‘knowledge’ seem to manage quite well without agency intervention!
          It’s all very simple, it’s only agencies that make it ‘appear’ complicated to justify their fees.
          Come on, you had a run at it, but now the party is over. Find another career.

      2. being both a landlord and a tenant, the cost of the referencing is always high and agencies make huge cost on this. The ability to pay the rent depends on income into their banks, the banks charge a very small fee (usually around 25 pounds) to furnish this information, however agencies charge up to 250 pounds, exhorbitant amounts of money for a simple letter. The fees are always extremely higher and unnecessary. The paperwork is simple and it is always worth the landlord getting insurance, that way you are covered. You dont need agencies at all.

      3. You are spot on tenants should pay for the credit check which is about £20 max and its refreshing to hear a landlord sticking up for tenants. The only way these estate agents have survived is by ripping the rental market since the recession.

        1. Why should the Tenants pay for the Credit checks? Credit checks are required by the Landlords so let the Landlords pay for it… What else? A fee for drafting the Tenancy agreements?

          1. Why should we ??? Why should we let someone we dont know say yeah I can afford and yeah of course I’ll pass knowing full well they probably wont ??? Us landlords pay the cost, referencing fails then off they trot at no extra cost to them leaving the landlord to foot the bill !!

          2. Because many tenants are financial basket cases, and others treat their agreements with contempt.

            Why should I pay the fee to discover the tenant has a bad credit rating? Or failed to pay their rent which is wy they are having to move!

            I certainly am not trusting a tenant with tens of thousands of my ( expensively) furnished property without knowing whether they can be trusted. And I am not paying to find out they are liars.

            It cost me thousands when they let me down.

            I am not justifying some historic silly agency fees, but tenants MUST pay for reasonable referencing.

            Also… when they lose a key, I have to change locks. That does not come cheap.

          3. I’m arguing this exact thing..I am renting my house and my landlord is also a personal friend and he agreed to me moving in before he decided to give all his houses including mine to an agent..I didn’t have to pay the agent anything because he told them he didn’t need references and such but now my tenancy agreement is ready for renewal the agent wants to charge me £50..my landlord said it’s what agencies charge…any advice? ?

          4. What if the tenant fails the credit check because the tenant didn’t disclose bad debts, ccjs. Or misrepresented their ability to pay the full rent based on their income? And requires a guarantor, who also then needs to be credit checked?
            If the application fails, the landlord loses out. It should be the tenants responsibility to be credit worthy.

          5. That’s business Kate Richards.
            Now you can fully appreciate that renting homes is not just easy, with money all pouring from the tenant.
            Now you will have to run it like a properly costed business

        2. No they shouldn’t as referencing is for the landlord’s benefit not the tenant so the government made the right decision and the landlord should pay

          1. I haven’t previously asked for a holding deposit. Following the decision that landlords pay for referencing I will now request one as some kind of reassurance the tenants’ applications will be genuine.

      4. Yes I agree. Agents are milking the tenants and come to think of it the Landlords as well. Doing a credit reference doesn’t cost a lot which the agent could easily lose in the maintenance charges which can be from 10 to 15% of the rent.

      5. Really. You need to be in the real world. Charging for a credit check at cost. That would be similar to going to your Lawyer, Doctor or other professional service providers and asking them to provide you with a legal document “at cost” It’s not going to happen as they need to charge. I am against huge fees but good letting agents still need to survive by charging their worth. How do I know this? I’ve owned a property management business and they don’t run on fresh air. I worked 7 days a week and even was out in the middle of the night tending to problems from time to time. The Government needs to put time in regulating the business. Get rid of the businesses like the one which manages two properties in our street. 1) has taken 4 weeks for a boundary to be decided belonged to next door which included 1 visit to the agent and 10-15 emails detailing the problem and repeating ourselves.. 2) property over the road is very overgrown. I’ve asked to tidy this up the grass/weeds are a mess property is empty about 12 months now. I’m not supprised as this is how this agent carried on

        1. I think comparing a Doctor or a Lawyer to a Letting Agent is a bit of a stretch. Which university do you go to for years to gain the skills to become a Letting Agent?

          Agree, fees for services rendered as long as they are reasonable is fine. Comparing a Letting Agent to a Doctor, respectfully, what planet are you on?

        2. Bar,
          It’s called running a business. It costs money, do your sums right and will still profit.
          Asking tenants to fully fund your business is both ridiculous and now, unlawful.
          So instead of having a gripe because your business now has a cost attached, embrace the fact you will now have a larger audience for it.
          Referencing is as simple as an email to a previous landlord, completely free and hassle-free

      6. As a matter of interest, I have just had to re-rent my property which will fall under the new laws. My agent has just sent me the ‘new’ charges, to include £85 for a new inventory and £150 each for the two prospective tenants! This is ridiculous! Looking online I can find tenant credit checks for £6 to £12 – obviously, the agents now intend to recoup the loss of overcharging the tenant by over charging the landlord. The only answer for us is to increase the rent to cover these extra charges … so no winners here then?

        1. Yes it was ridiculous to charge tenants £150 for referencing, and it continues to be ridiculous to charge landlords £150 for referencing.

          There is a possible winner if you ditch your agent. If you use OpenRent, our referencing is just £20 per tenant!

          1. hi Sam

            my contract has a clause as follows:

            “Give two months’ notice to expire at the end of the fixed term of the tenancy or at any time after the fixed term expires, when said tenancy shall have reverted to a Statutory Periodic basis which must be on or before the next rent due date if they wish to vacate the Property.
            In the event where the tenant(s) and the landlord are in mutual agreement to end the tenancy before it’s fixed term or before the final two months’ notice has expired, an administration fee of £50+vat (if applicable) is payable. Please note that a fee of £35+vat (if applicable) per tenant is charged for providing references to third party including other letting agents.”

            can you help and tell me if this is within new legislation (1st June 2019)???

            ty

          2. Hi Kourosh,

            Assuming this is not an OpenRent tenancy, the landlord can charge those fees until 1st June, 2020. At that point, they will become illegal. If you renew that tenancy between 1st June, 2019 and 1st June, 2020, then those fees will be illegal.

            Why is the agent charging £35+VAT to give references! That’s very mean spirited.

            Sam

          3. Sam (OpenRent)
            I take it you will not even be able to charge £20 referencing come June 2020?

    3. That is very unfair and I would think challengable. I would argue it with the agent and take the matter to the ombudsman if necessary.

      1. Alan,
        This would already have made a visit to House of Lords.
        It’s an Act of Parliament and as such cannot be changed or altered.
        It would take a further Act to do that which is about as likely as the moon being made of cheese.

    4. This is awful and as a landlord I totally agree with this. I do think tenants should pay for their own references but they should do this once in a set period.
      Landlords should be registered and vetted. They should also be crossed checked against inland revenue to make sure they pay tax on the income. The gov know there are many that don’t and do nothing about it.

      1. Tenants should not pay for the referencing!!! If the landlord wants referencing done then the landlord should pay! Tenants are generally not well off and need ahome to live in, and most do pay very well.

          1. So who references the landlords? In my experience in London many of them are liars and cheats too and rent out unfit properties at exorbitant inflated market prices and proceed to neglect the tenant from there on!
            How do you like to be in that bag of apples?

          2. In a word, yes. Landlords have to pay income tax on their rental income, they should also be able to claim tax relief on their reasonable expenses arising from referencing.
            Tenants can’t claim back referencing fees, it’s just an additional expense in already costly exercise.

          3. Sammy,
            It’s just a business expense. All businesses have costs, yours is no different.
            Claim it back on your tax, if you have registered.

        1. Most well off !!!! Thats a joke and completely stupid to assume that !!! I make a small amount from my 2 properties a month and for fear of having unpaid rent or property trash I pay alot out in rent protection and insurances. My tenants have both been in the properties for 4 years and as they do struggle at times (as I do !!) I have never put the rent up as I’d much rather keep good tenants who pay on time and look after my property (and I know as I do my checks 6 monthly) Its not a big ask at all for tenants to pay the referencing fees. They should now if they will pass it but as a landlord we have no idea so its just not fair and its not a case of “if the landlord wants referencing” its a case of having to do this surely. Would you expect a bank to give you a large loan or mortgage without looking at your background ? Smell the coffee !!

          1. Hi Kate, I agree with you (and so must my Landlord). I’ve been a private tenant since July 2016. Coincidentally, I have to renew my agreement today. I’ve never missed a rent payment. My Landlord agrees that i’m a good tenant, as the 6-monthly checks have shown that not only am I looking after the property, I’ve improved it. My Landlord ISN’T putting the rent up. When I sign the agreement I have to pay the estate agent £120 – this is my share of the agents costs. I’d much rather pay £120 every 12 months, than suffer a rent increase every year.

      2. No I disagree. Tenants should never have been responsible for referencing fees as it’s not for their benefit but for the landlord’s benefit so they should rightly pay!

    5. Landlords should have a star rating for
      Fairness
      Attitude
      Maintenance of property
      Compliance

      In fact how about a prospective landlord paying a fee to the tenant so he/she can be credit checked and referenced? After all, it’s in the tenants best interest to know he/she won’t be evicted due to repossession order or landlord bankruptcy.

    6. The comment above, is a good example of what went wrong with fees. There is a problem with how the market and landlords are viewed because of greedy agencies and mega Landlords. Small landlords (5 or less) who charge a fee of £100 are simply covering their costs. The fee is small and reasonable. Big agencies who scam tenants out of £500 fees became the norm. They are a plague on the industry.

      Why not a cap? Government is just blindly hurting small business and driving rents up.

      Also a bad tenant costs £1500 to £3000 to get out. With long wait times for courts and bailiffs. Why is it now being made more cost effective for bad tenants?

  3. I hope this ban actually does go through. I paid £425 +£425 +£215 rent for 1month +a month & half deposit + £250 which included references and drawing up contracts and after 6months they wanted £150 to extend my tenancy for another 6 months. This has got to stop. It the only way many can get a home .

    1. I agree with what you say, however it is unlawful (high court ruling against Fox’s in London) to charge you extra to extend the tenancy as it simply rolls on. If they have charged you then you have the right to take it to court and expect interest.

      1. Do you mean FOXTONS V CAMDEN COUNCIL, appeal 2017?If so, that was not the reason.It was because they quoted a general fee of £420 and not explaining fully the purpose of the charge other than to say for admin fees which is not allowed.

      2. I am a landlord who uses a letting agent. I have been charged £125 every year to relent to the same tenant. Would it be possible to get this money back when the new letting laws come into force.

        1. I am very interested in the answer to this question, as I am in the same position. Moreover, the freeholder’s managing agent charges a ‘tenancy administration fee’ of £100 plus VAT even though they have no contact whatsoever with my tenant. I consider myself a good landlord – I have had tenants in my properties for upwards of 15 years and I would never let a property I would not be happy to live in myself. But it seems to me there is less and less protection for landlords from either unscrupulous managing agents or bad tenants.

  4. I really hope this Bill passes!
    It’s about time something is done about these horrendous fees landlords and agents are charging for references they don’t really check.

  5. I hope n.reland gets this as it’s an outrage you have to find over a thousand pounds before you get the house which people can’t afford ridiculous what they look for off people

  6. It should endorse straight away. Tenants are not just paying for referencing and admin fee but they are also paying mortgage for someone else and making them richest from rich.

    1. This is such nonsense. A comment riddled with jealous undertones. Many landlords have inherited property on which there are no debts but the inheritor requires interest on the capital involved greater than would accumulate if the same capital sum was invested in a bank. Most landlords are decent people, some tenants are not, some tenants turn good property into squalid slums.

    2. That’s Rubbish there is now no money in it gor small landlords like myself thanks to the Government. I pay an Agent a tenant find fee and if they charge more rents will have to increase to cover this!

  7. It’s about time. But this must be fast forwarded into it being LAW A.S.A.P. They also must must stop agencies from being allowed to not provide the landlords phone number for in cases of emergency. I had a flood from a burst pipe 00:20 . Yet the estate agents,’Property Solutions seem to think that an ex employee from six months back still being used in their emergency email address is adequate. And any email address is still not acceptable. I had water gushing and my landlord is now saying he’ll only pay half because I didn’t email the old email address. And now they’re also saying that when I turned the stop cock off after finally managed to figur out where the stop cock was and turned it off, that it was no longer an emergency! I was still paddling in water . I am disabled living alone. My only contact was the estate agents email address with an old member of staff who’d left months and months ago. This is not good enough. I’m currently in dispute about it as it happened last weekend on the 28th November 2017.

  8. It’s ridiculous the amount esate agents charge tenants. £240 to set an agreement up seriously one click of a printer does not cost that. £120 to renew a tenancy. How can open rent dona credit check for £20 pp and estate agents charge £100 upwards pp tenants need this new bill as there sick of getting ripped off.

  9. I don’t see why charging for an inventory is a scandal. We charge our Landlords for the check in and the tenant for the check out (both at cost might I add). What’s not fair about that given it s in both parties interest to have one. We charge referencing at cost and dont see why that would be unfair to pass on. I think the problems stem from the large high street agents that rip people off. Being a home based agency we can keep our costs right down and pass on what we deem to be fair costs…(we currently only charge for referencing and check out report for the past 5 years).

  10. Personally I don’t feel it is fair to ban fees outright, rather that they should be limited to a reasonable amount, such as £50. Otherwise I think there is a very high risk that many tenants will simply apply for multiple properties, messing landlords and agents about. Those costs will ultimately come back on all tenants as increased rent.

    1. Large amounts of money too landlords why would not be serious landlord and agencies take lot of money to secure property; find out have not passed credit checks , big scam

  11. About time my sister applied for a private rent and didn’t get it lost over £200 then needed to find the same amount again for next property its a rip off. Ive been lucky with mine he wavered the fees as I was in a right dump moved twice since with same landlord he’s the best

  12. I’m a landlord and don’t charge any fees except £30 to do a reference check. I’ve lost money on tenants who have not taken up a tenancy and cost 3-4 weeks of lost rent in the process. Plus tenants who have not treated my rentals well even though they are well maintained throughout.

    At the very least now I will be asking potential tenants to submit all income information before I payout for a reference check. ps. I don’t employ agents to manage my properties so perhaps I’m one of the few…

  13. i have just paid £480 holding fee. The agents are charging me £300 of that for getting references. All they did was ring my employer for that 300. In total with first months rent and deposit I will have had to pay out just under £2000.00 to move in to a property. Its no wonder people are homeless.

  14. I’m a private landlady and my tenants just paid £20 ref fee each via Open Rent. Deposit is protected in DPS scheme, it’s their money not mine. I got new tenants in the day after my old ones moved out. I really hope these laws come in, from my point of view if I have to pay to reference them that’s a small price to stop these rip off agents. Lets hope it puts the parasites out of business.

    1. I hope the DPS scheme works for you because it certainly isn’t working for me (as a landlord). My tenant damaged the parquet in one room and floor tiles in the kitchen, as well as leaving the walls filthy. I asked for a retention of £120 out of a deposit of £600, although it cost a lot more to redecorate and replace flooring. The tenant appealed and won. So what is the point of the DPS?

  15. About time, wer’re just looking to move due to work and the agents fees are just 7nder £2,000 by the time you take fees, reference checking etc, last property we rented they charged £400 for inventory which we had no choice over and we never even got a copy. They also demanded 3 months rent as we had a pet. It’s extortionist and lacks control and competition. I hope this goes through quickly. I understand agents need to cover their costs but they do charge a lot in commission on rentals so it should make it a more competitive market.

  16. Im about to sign with a private landlady and she wants to charge me £150 admin fee. Has this draft bill been passed? she says its for referencing, paperwork and certificates and inventory.

    1. No – unfortunately the Bill is still in the draft phase, so we’re a long way from a vote on a final bill, and even further away from a ban being enforced in England & Wales.

  17. And DO check that the fees charged by agents ARE displayed on their website. They have to show each fee, including VAT and what it is for. My UNI student daughter received an e-mail requesting £250 for “fees” – no breakdown at all. On checking their website (Clifftons in Bournemouth) I find the Student Referencing fee shows as only £180 (incl VAT) …….apparantly the website hadn’t been updated (hmmmmm…) so they would “hold” to the website price and I only need to pay £180 – which is still iniquitous considering you can do your own check Free of charge!
    How many students have overpaid these fees, I wonder?
    This bill can’t come in quick enough!!

  18. I hope this passes. Trying to find a place to live is hard these days. As a private tenant i think that the fees are unfair and unjust. They vary from one place to another and even if you use the same agent/landlord you get charged (most of the time) again. Considering you can get a statutory credit report for about £2 and usually have payslips to prove income which are these not accepted by most agents (I have tried) why do they charge £100’s. Now I agree that checks should be done which costs time and money and should be reimbursed but as a previous post says it’s edit a saved document and print, post or email and check responses. i would agree to a fee of £50 per applicant per agent covering a period of 6 months would be fair as the data can be reused or let the tenant provide the data (as long as it is from a reliable source)

  19. If more landlords took the time to actually get to know prospective tenants instead of getting a profit-first ask-questions later agency to do their legwork they would have fewer problems with nuisance tenants, non-payments etc. The ban on agency fees is long overdue and it would never have happened if the combination of laziness and greed by letting agents and landlords hadn’t been allowed to run rampant. You had your chance to be reasonable – despite a significant minority who are decent landlords – you blew it.

  20. I am company Secretary to a small privately owned organisation which purchases good houses to rent to people who cannot afford to buy in the area they would like to live. We have excellent tenants. Our gripe is with one of the letting agents we use. We are charged (as is also the tenant) a huge check-out fee on the day a new tenant moves into one of our houses. This has been queried umpteen times but no satisfactory answer received.
    Mistakes have been made on Inventories; our objections have not resulted in amendment of the Inventory. If letting agents’ charges were not so high, it could bring about lower rents being paid. It is intended that future purchases for renting will not use an agent for renting the property except for the initial contact with a prospective tenant.

    1. Hi Phyllis,

      Bin the letting / estate agent and do it yourself. Years ago I operated my own lettings management company and with great success. Put simply we visited any perspective tenant in their current home to see how they lived before offering any tennacy, we charged very small admin fees and no renewal fees for tenants.

      The only reason that I no longer do such is that I have gone into project management within the construction industry.

  21. as an agent we charge £70 for referencing and inventory and all charges all the way up to moving in.if for some reason the credit check fails we keep £20 from the £70 and refund the £50.

  22. I work for a letting agents and I agree that the fees need to look at however, abolishing fee’s altogether is not going to have the desired effect that everyone is hoping for. Landlords should pay for tenants to be referenced, this has always seemed backwards to me the way it is currently. Inventories, check ins and check outs should be paid for by landlords and this is how we do it at our agency. When a new contract is drawn up we charge our tenants and the landlord half the fee each. I think a lot of people from outside the industry don’t understand the work that goes into a lot of what a letting agent does, although I fully agree a lot of agents do abuse the current system. If fee’s are abolished completely I can guarantee you will see an increase in rent and unless the Government is going to put a cap on rent (which isn’t going to happen) then this won’t work. There needs to be limitation on fees not simply abolish them.

    1. Hey Paul – thanks for your comment! I hear this point of view quite often. The discussion usually focuses on ‘who should pay the costs’. But actually, the costs of creating a tenancy can be reduced to amounts so small that they make the ‘who should pay for it’ question quite insignificant.

      OpenRent can create a tenancy (including tenant find) for just £49 for landlords, and £20 for tenants if referencing is required. In the context of these services being available, the idea that a landlord would have to raise rents to absorb tenant fees becomes quite a stretch!

    2. Hi Paul,

      Having read your comment I have to agree with Open rent. Tenant referencing is avaliable online for a mere £9.99 and open rent does it themselves for just £20. The average cost of a Tenant Reference in Hastings is in excess of £200 which is a total rip off.

      On top of referencing are excessive charges for a Tenancy Agreement which is a free document that may take just 10 minutes to complete, add to the equation inventory fees and check in fees it can easily total a months rent in fees plus a months rent in advance plus a months rent as a deposit. I should point out that Hastings is by no means wealthy and many tenants have not got that amount of moeny to spend.

      Estate agents typically bump up rents in the hope that a tenant will apply and pay the monthly asking price, the market should dictate the rental value and not the letting / estate agent.

      Whilst I am sure their are some good honest agents perhaps as you are the majority are just interested in how much money they can sython from both the tenant and landlord.

  23. I am renting a property from an agency and they charged us for inventory fee , guarantee fee, check- in fee and many more . I didn’t have any other option as all other properties were even more expensive in terms of rent or application cost . This law should have been been brought to UK ages ago , income doesn’t increase but the cost of living does . Agencies are upset about the new changes that might happen soon and threaten with increased rent. The government should introduce a limit to rent increase however I doubt that .

  24. I abhor letting agency fees…it is a scandal.
    I once rented from Hyman hill agents for a couple of years but wanted something bigger. I viewed a different flat with the same agency and said I would like to move in. The agency told me that I’d have to pay full referencing fees to move in!! Even though they had done all my references for the current property I was living in and the only update they needed was from themselves as my current landlord.
    What also upset me was when they had arranged for their 6 monthly check on my flat, the agent didn’t even knock when he arrived, he just opened the door with his own key!! I was just standing there I disbelief when he showed himself in!!!
    Needless to say I won’t go near an agency now and have had brilliant (human) decent and reasonable landlords since then who have benefited from me being an excellent tenant (despite having bad credit believe it or not!!!)
    It would make looking for a new home so much easier with this ban.

  25. Hi, Great Posts everyone – has any one got any idea when this is likely to come into effect ? I would like add that for us as Landlords we have a cost for doing legally essential checks such as a tenants “right to rent” (ie border control enforcement) “how to rent” booklets etc and many other checks to assist the government, the previous Landlord and the tenant – however some credit checks and referencing is for our benefit also. It seems that this new legislation is a sledgehammer to crack a nut -the main issue is London agents were the demand is high charging extortionate high fees due to high demand. For most a charge of around £50 to cover the essential costs is sufficient and would stop landlords to charging higher rents to cover their costs which will surely be the consequence should this bill be enforced.

  26. It is about time Estate and Letting Agents stopped raking in money from Tennants. Having just read this article I have done a little bit of research and often have found that a tenant could lay out as much as £500 and fail a credit check to lose all that they have given a greedy agent.

    Referencing fees for Tenants are readily avaliable on line for under £10, quite often an Agency will charge £200+ and if the draft bill become legislation then I am sure such agencies would close their doors.

    The landlord in fairness also needs to be protected as they have an investment in the property and should accordingly recieve their rent, perhaps we should look at the Scottish laws on tenancy as they acted some time ago to protect the tenant and the landlord which stopped agencies ripping off both parties.

    I do hope a tighter bill is enacted and with luck it will protect both the Tenant and Landlord, call me a cynic but I daresay a watered down bill will be enacted.

  27. Some great and thought-provoking posts here.

    I’m an accidental London landlord. Not in it for profit but expect to at least break even and enable short and long-term maintenance to a good standard. I charge market rates and only just manage it. I consider myself a decent human being, always putting the tenants’ wellbeing first. But I have been – rarely – mucked about (sub-letting, filling house beyond capacity, tenants disturbing neighbours, late payments). I’ve had fraudulent applications which passed agents’ referencing. Both tenants and landlords need basic protections. It seems that the real winners at present at others’ expense are agents, particularly the big ones.

    I am pretty dismayed by the charges made by agents (in this case Dexters but I’ve also had a similar experience with Countrywide) against both tenants and landlords. Without property management, they already charge between 9 and 13% throughout the tenancy (say an average of 18 months?). What are they doing for that significant income, given that increasingly they also charge (either landlord or tenant) for a separate “admin fee,” referencing, EPC (a simple tick-box exercise once “qualified”), inventory, mid-tenancy inspections and check in/out? And they don’t take any responsibility for non-payment of the rent they are paid to manage. Even when done diligently, and I’ve experienced both, this feels like a lot of money for maybe 4 or 5 viewings, 1 set of paperwork (2 if one falls through) and holding/arrangement of holding a deposit? And when agents fail to perform, there is very little come back for either landlord or tenant.

    Thanks to companies like Openrent, we are now becoming aware of some of the true costs of the services agents provide. There are certainly good agents out there, and decent people working in them, but surely a rounded rental housing market requires some regulation of what agents can charge and must provide in return too?

  28. As a landlord, I wish to know that a prospective tenant can pay their bills, peacefully enjoy the property and keep it in good order, reporting any defects in a timely manner.

    References from banks, previous landlord etc seem fair to achieve this.

    What is wrong with asking for a fee to cover the time involved in following these up?

    1. Hi Dave, great point! You’re certainly not alone on this. Just to play devil’s advocate, tenants might reply that what’s wrong is that all those things benefit the landlord, not the tenant, so it’s wrong to ask the tenant to pay for them.

    2. Letting agents subcontract referencing to a referencing agency – it costs about £25 (send a couple of standardised emails, do a credit check – ten mins later bobs your uncle). They then charge tenants £150 for the pleasure. It’s a scam.

  29. Great posts on the topic!

    Like most things in the UK the Government needs to step in because a few agents are completely taking the piss on fees. I am a small independent and I believe there should be a small fee but capping it at £100 will allow time and process to be covered.

    1. Hi Alex, Yes certainly some agents are simply ripping tenants off. But It is definitely possible for agents to prosper without charging tenants anything. The fee ban will just incentivise agents to embrace more advanced and efficient ways of serving landlords and tenants, so they have much lower costs for ‘time and process’.

  30. Last time I rented my property I had two applicants fail their referencing – in each case they assured me there would be no problem. Due to the time taken my property ended up being empty for 4 weeks – a considerably greater loss than the cost to the tenant for referencing. Tenants should have to pay a deposit which is not refundable if they fail referencing, but which is taken off their rent if they take up the tenancy. This would stop those who know they aren’t going to pass referencing from applying. I think the first tenants I dealt with hoped that I would overlook referencing because they kept making excuses as to why they hadn’t finalized the forms. Presumably they thought if they held off long enough I would just let to them without the references. In future I will self-reference to a point where I am fairly sure they will pass before I use a rental reference service, but this is to avoid the wasted time rather than the cost.

    1. Hi MKmum, We suggested a similar system in our reply to the Draft Bill, but with a few differences. We think that it’s fair that a holding deposit is returned to the tenant even if they fail referencing. But if the tenant can be asked at least to cover the cost of referencing (around £20) then that’s enough to put off tenants who know they won’t pass without unduly penalising tenants who apply in good faith!

    1. Hi Trevor, deductible expenses are simply removed from your taxable income. This does not make them ‘free’, it just means you can subtract the value of the fee from your taxable profits.

  31. Prospective tenants should pay for the cost of referencing, why should a landlord have to foot the bill for a succession of applicants who fail referencing. Knowing that they may fail referencing checks is no deterrent if there is no cost to the applicant.

    Many agents have certainly been overcharging for this service for years, and that should be ended. As a landlord who does not use agents, I have the referencing agency directly charge applicants the £25 or so cost. I then subsequently refund this to successful applicants. I see no reason why I should refund anything to failed applicants who do not become my tenant, and probably knew they would fail before applying.

    1. completely agree with this but even if all checks come back clear and they decide on someone else because they prefer them the applicant still loses their application fee. In total I’ve put across 600.00 for fees and on each occasion did not get the house I wanted. I fought to get my money back and I was successful. but it’s very stressful.

  32. How much do landlords think the average person earns when charging exhorbitant rents and not ACCEPTING DSS into the bargain. Also a reference can be done by telephone and a letter, the cost is extremely minimal so why do they charge exhorbitant fees for making a phone call and buying a stamp. they should hang their heads in shame and learn to be human and not be so greedy.

  33. It’s not just about the fees. I think the landlords themselves need to meet with the prospective tenants. On paper (credit check) I’m classed as a risk but no one takes in to a.c. my rent history being impeccable. Utilities always paid and proof can be provided. Having an incurable illness which has forced me to reduce working hours and caused money issues are not even considered. Only what experian says.

  34. This is long overdue. Rents are increasing more and more and yet the fees are making it nearly impossible to move. Recently I found myself in a situation where i became a single parent. Although i was working i found it extremely hard to find an estate agent that would take me on as i had only one income. After ALOT of searching i found an agent however I had to get a guarantor…. at 35 this was so degrading to have to go to my parents and ask them to help even though I worked full time. So not only did i have to pay referencing fees for myself I had to pay for referencing fees for my dad too. With referencing fees of £300 each then contract fee of £100. I also then had to find 6 weeks rent as a deposit and a months rent in advance. As a single person this wiped out all my savings as well as my dignity.

    1. Hi Louise, I’m very sorry to hear that. It’s quite outrageous to charge anyone £300 per reference. As you know, the maximum a tenant would have to pay with OpenRent is £20. There’s no reason to charge £300 for referencing only.

      Wishing you the best of luck in your new home,
      Sam

  35. Hi I haven’t read all the comments on here but wondered if renewal fees are still legal? I am 2.5 months in to a tenancy agreement and the agent is asking me to recommit to another 6 months with a £50 rent increase and £120+vat renewal fee and pay in advance! I knew there would be a renewal fee but asking me to commit 3 months early makes me wonder if the renewal fee will be banned before my tenancy ends and they are trying to be cheeky and get it done before then.

  36. Not sure if anyone can help or advise. I’ve been a private tenant for 8.5 years on a monthly rolling contract( 6 month initially) Its my landladys first time renting her house out so she’s inexperienced. She lived in the property for 5 years prior to me moving in. The letting agents manage the property ( albeit poorly) on her behalf however she did say I can ring or text whenever I want to. However , with all maintenance jobs, the letting agents have to get her approval before any jobs are done. The letting agents have wrote to me saying they will he increasing the rent from £675 to £695 ( without bills). There’s been no previous increase. They blame this on ‘ new legislation’ & ‘ you’ll see the whole country is increasing rent due to these changes’ & ‘ the costs have risen dramatically for Landlords’. Ok so what costs have risen that apply to either party? Ive asked them this & they didnt seem to have a transparent answer. Just the smokescreen of the above. So if mortgage rates or/and management fees have suddenly increased, can they legally pass those onto me? Seems a coincidence that landladys mortgage goes up at the same time, the xhanges come into play. I do have 2 months to appeal & I can inform my landlord why I object( which I’m in the process of doing ). Due to letting agents not being allowed to charge new applicants fees for new tenants, I think they’re trying to recoup their losses by increasing rent under the guise of ” new legislation”. As they will lose new tenant fees after June 1st. I cant afford legal advice but dont want to just sign & agree when for £20, per month I dont gain anything. I’m unsure currently whether the landlady has asked for the rent to be put up or the letting agents have suggested it & hope most tenants just sign without questioning it. If anyone has experience on this , please respond.

    1. Hi EL, it sounds like you should call the landlord and tell her how poor the agent is, that they rely on charging tenants large fees to keep in business and that your landlord should manage the property herself and save thousands of pounds per tenancy!

  37. Agents have come to this point because of pure greed.

    Take the actual cost to the agent of visiting, photographing and listing a property – assuming the employee has a salary of £25,000 (higher than most agents pay)… that works out as an hourly cost to the agent of approx £14 – say 1 hour to visit & photograph, plus the same to list so the gross cost is £28.

    Then turn to the cost of processing an application, referencing costs around £5 (the more you do the cheaper it gets) and agents simply fill in a template for the tenancy agreement that takes 5-6 minutes to complete. Say perhaps half an hours time in total at a cost of £7 (labour) + £5 to reference. total cost £12, plus the cost for the property (per above) at £28 and you have a total cost to the agent of £40… add in 150% profit for the agent and you get to £100 maximum.

    Agents however charge an average of £300 (£700 in London) 3+ times a reasonable, realistic amount… excessive, unreasonable and warranting Government action to pull the cowboys into line, although I personally think a legal cap on fees (say £120 = 3 x costs) would have been more reasonable, but agents only have themselves to blame.

  38. I have noticed a number of the responses on here estimating referencing as costing £20 to £25.

    As an individual I can get a reference done for £12.95 – one of my companies does occasional referencing and this costs £9.95 each… however it is possible to “bulk buy” (pay upfront for a number of references) and reduce this to £4.95, or even £3.49 per reference depending on numbers… I would expect most lettings agents to be buying referencing in advance and therefore unlikely to be paying more than £5 per reference undertaken. Any agent charging more than £20 for referencing is making a substantial profit out of the hapless applicant

  39. I think that checks are necessary before a tenant takes up residence, but they can be done more cheaply than the charges that are made by agents.
    If I look myself up on Experian I can show my credit rating quite easily. For an in-depth credit examination, I can simply pay Experian £11 or so, then I can share it with the agent at no extra cost.
    By disclosing my rent deposit scheme account details to the agent , they can see whether my deposits are being returned in full, or are being retained, on my previous tenancies. This tells them whether I was a good tenant or not, and costs nothing to perform.
    To prove that I am solvent, I can show my financial condition by bringing up my online banking, and showing that money comes in regularly from salary or UC, and that my previous rent payments have gone out regularly on a monthly basis without defaulting.
    It can all be done with very little cost to anyone. Yes one may have to go into the office to do this, but you’d have to go in and sign the lease, make the first payment and get the keys in any case, so an extra pre-visit is not onerous. I’d rather do that than be charged £200 for a tenancy application.
    As for a lease fee, I feel I could draw up a lease in about 10 minutes by simply filling in a few fields on the lease template. Seems too much to charge £50 for doing so, and for renewing it.
    The thing is, if fees had been reasonable over the years, this legislation would never have come about. It’s only because too much has been charged that it is has become a subject of debate and complaint, and now legal resolution.

  40. I am a tenant looking for a property since March……We are now in May and I am no further to getting anything. Countless estate agents not all but the ones I’ve dealt with have provided misleading information, blatant lies and then asking you to pay an admin fee. In total I’ve given near on 600.00 and have no house to show. nothing to do with refs each time mine came back clear. its who they like on the day. so very glad this law has come in. I had to fight to get my money back but I got it back.

  41. I am a landlord and don’t agree with this at all, it should be the landlords right to charge what he wishes and the the tenants right to decide if they take it or not.
    Lowering deposits to 5 weeks rent is simply not going to work. Landlords will put their monthy rent up to cover it to negate this.
    I for one am now putting my rent up due to this and will explain it to my tenants, if they don’t agree this is unfortunate for them, but thats what has to be done..
    The legislation is going overboard, many landlords will sell up because of these constant problems being created, and the effect will be less housing available for rent…

  42. Hi,

    What is the treatment for landlords w.r.t. tenancy deposit under the new rules if a tenancy renewal was signed before June but comes into effect post June?

    1. Hi Anoop, My understanding is that if the tenancy agreement was made before the Act comes into force, then the fees are permissible.

      Sam

      1. Hi Sam, my wife and I have a small company providing what we believe are 14 high quality homes for rent. We do take deposits (a flat £250) but do not charge any other ‘entrance fees’. We manage all properties and find tenants ourselves and have done so for 9 years. Overall we believe the fees legislation may be good for tenants and should (hopefully) help clean up the sector by forcing unethical landlords and agents out. That said, the new law is very one sided and in our view appears unnecessarily tough on fair and ethical landlords.

        For example, are you able to advise if the following are classed as fees and as such are now outlawed? If they are, it serves to prove my point that this legislation is somewhat unfair and may not ultimately deliver the tenant benefits it aims to as rents could rise and therefore ‘whole life’ tenancy costs rise. It is only through well balanced and fair legislation that tenants will benefit in the long term.

        1. for security reasons we currently charge £75 to fit new property locks if a tenant leaves without returning keys as this is what it currently costs us.

        2. If a tenant leaves the property in a condition that means we have to take rubbish to the local tip we charge £50 or £100 if we have to get a contractor in.

        3. We currently cap energy bills and although we have never had to invoke it, have a clause that allows for excessive use should this occur. The process and amounts are in the AST and known to the tenant before it is signed. We believe this clause, together with careful tenant selection, has helped us to maintain good value rents over the past 9 years.

        1. Hi Mark, thanks for sharing your practices as a landlord. It sounds like you and your wife do a great job.

          (1) would be allowed as it relates to security devices, and you can prove the cost to yourselves, so you will be able to charge this under the new rules if you include the terms in your tenancy agreement.

          You will not be able to charge for cleaning items, even i for example taking them to the skip (2). You will, however, still be able to deduct any damages from the tenancy deposit. So if a tenant damages an item, e.g. washing machine, by using it improperly, then it is possible that you might charge for the removal of the damaged item. I would need to look into this further.

          You can still (3) charge for utilities as part of the rent. Another slightly grey area, and it depends on the terms of your tenancy agreement and the specifics of how those energy bills are charged, but it is possible that this could be permitted depending on how it is worded and how the use is linked to rental amount. To be safe, however, I might recommend dis-aggregating rent and utility payments, letting the tenant arrange their own utilities so you have no risk of their use exceeding their payments to you.

          1. Hi Sam

            As i said in a previous post, the deposit holding scheme seems to be entirely biased towards tenants. Even though I only asked for a very small portion of the deposit to be retained (£120 out of £600) to cover the cost of replacing damaged flooring (with photos before and after the tenant took over the property), the tenant appealed and won so I had to foot the bill

  43. I am a landlord and had to pay very high agency fees, over £1200, to find a tenant, referencing etc. The tenant looked good on paper but actually caused a lot of problems with neighbours, smoking cannabis in the property, caused damage to the carpets and even the Environmental health became involved due to high levels of noise from the property. I found the agent unhelpful and this tenant cost me more money than it was worth to have a tenant.

    However I then used open rent. Initially i did not agree to have a tenant with DSS but I met a lovely girl who I got a good feel for and she’s been my tenant since this time. She claims DSS and I always get my rent on time. The property is always clean and tidy and we can easily text about any issues. I do my bit by dealing with problems quickly if and when they arise.

    It is really the luck of the draw but I would no longer trust an agent to find a tenant for my house as they really are about commission. There are good and bad landlords and good and bad tenants and there are arguments both sides about paying for reference checks, credit checks etc.

    This is why open rent is so great. Easy to use, viewings immediately and I found my tenant 2-3 days after I advertised.

    I think it is difficult as a landlord as I have been renting my property out for a year and a half and made no profit from this. My expenses still outweigh my earnings and the government seem to be clamping down on the rental sector. I think this will harm landlords who are not doing this as a business, with several properties in their portfolio, just something as a back up, a pension etc. As it is with the new tax changes, there is little point in me continuing to rent my property out so my tenant will need to find somewhere else to live, in order for me to sell the property. Otherwise I’ll need to increase the rent to try and make this a worthwhile venture.

    It is not as simple as rent out your property and make money. We landlords and tenants should be in this together but it is increasingly becoming us against them?

  44. Can you ask for rent in advance for when the tenant leaves, they give a months notice and that is used. It is not a deposit

  45. Hi Sam,
    I was wondering if you could help. Last week I paid £450.00 holding fee for a flat. I was told that this will fee will count as part of my deposit. Then I called yesterday to see what fees do i need to pay the agency and I was told i need to pay£888.00 to move in, that is £354.00 for each person (me & my wife) & £180.00 for inventory on top of the half to complete the rent and 1 month rent in advance; TOTAL £2088. I told the agency that I will be the only responsible for paying the fees as my wife will not be able to work so her reference was not important or valid as she is not from England and was only granted spouse visa. We have a baby daughter and the agency is urgent me to move in on the 31st of May when I suggested the 1st of June, as I get paid on the 1st of each month. Now this new legislation is coming into place soon. Is there anything i can do? £888 pounds it’s a lot of money and i don’t have the financial mechanisms to support that kind of fee. Thanks- gerry

    1. Hi Gerry, terrible that an agent is charging you so much. Really bad practice.

      It is, however, best practice to have every adult living in the property as their primary residence on the tenancy agreement. This is because, if you left the property, it makes it clear that your wife could still have rights to stay there until legally evicted.

      I think that if you insist on 1st of June and don’t pay the fees, then it is very likely you will still get to live in the property, because there’s very little chance that the agent would be able to find a new tenant now to move in in the next 8 days (i.e. before 1st June).

      Let me know how things go!
      Sam

    2. Thanks so much Sam fro your replay. I just had a phone call from the agency they agreed to change my moving date to the 1st of June, I mentioned to her about this new Tenant Fee Act and the ban fees and they said because I made the holding fee payment before the 1st of June, I still need to pay £880 to move in. I am not sure where I stand with all this and how to proceed. Cheers Gerry

      1. Hi Gerry!

        I have just seen your post, I have been doing some research into the fee ban, as I am also about to rent a property. If you have already signed your contract then unfortunately you will be liable to pay any fees laid out in it, however if you sign your contract after June 1st, then the agency will have to refund all your fees, regardless of when you paid them, and there will be no further tenancy fees chargeable for your tenancy.

  46. I am a good and thoughtful landlord who only charges £20 referencing fee and 5 weeks deposit. I charge the low end of market rate for the property so that it is affordable. When the tenant asked to move their property in a few days early – I let them free of charge. Even though it was their duty, I helped with the garden. Even though, strictly, replacing white goods is not a landlord obligation. I replaced the fridge within 24 hours of it failing. I have all the right certificates and insurances in place.
    Unfortunately my last tenant left not paying the last months rent and over £3000 damage. Literally they urinated on the floor and have left with no forwarding address. Insurance does not cover it as it is considered malicious on the part of the tenant rather than accidental. The deposit did not even cover the missed rent and time that we were unable to rent the property while repairing.
    Now I can’t even charge £20 for referencing?
    Sadly this will mean a rent increase for all new tenants.
    I don’t want to put pressure on people renting. I really don’t. I work hard to have a lovely house to rent out at a reasonable price. If the only protection I can have is to increase the rent to ensure I have a pot to pay for the damages from tenants.
    Who wins then – not the tenant or the landlord.
    I have had potential tenants that have lied and been found out via credit checks before.
    One weeks holding deposit is not enough they can take 2 weeks to fail the tenancy check.
    I am quite concerned about this.
    I have already had to pay £800 for a HMO licence. The costs have to come from somewhere and I am afraid tenants will be affected in the long run.
    If rent does not go up then rental quality will surely come down.
    My children rent where they live and have to pay enormous rents to have somewhere nice to live.

    1. Hi Dawn, I understand your points. I think that most tenants, though would rather pay £20 more in rent across a tenancy (e.g. 1 pound more per month) than risk being charged £300 on average by an agent. It’s the transparency as much as the saving that tenants value — and indeed need to be able to plan their futures.

  47. Why don’t these good for nothing agents get off their lazy ass and make some phone calls and do the references them selfs. That’s how it works in some other countries.

  48. I did read the article but am still unclear about renewal of tenancy fees ?

    Under Heading Changes to Tenancy it says this:

    Crucially, this exception does not apply to renewals or changes to the length of the tenancy!

    So just not sure if this means that they can charge tenancy renewal fees or they cant. Can anyone advise?

    1. Hi AS, if the exception to the rule doesn’t extend to renewals and changes in length, then that means the rule applied to those things. The rule is that fees are banned. Therefore, it is not permitted to charge for these two things. I hope that clears it up!

      Sam

  49. The tenant fees ban is set to affect both landlords and agents, who won’t be able to pass on the cost of activities such as inventories, tenant referencing, and credit checks to tenants. This is a problem, because these processes all involve time, people and systems, and hence generate a cost.

    1. Hey Vibrators(!), Any genuine costs for the landlord could be covered by the rent the tenant pays. What’s important is that tenants can no longer be ripped off by speculative, unfair fees from agents that are not linked to specific activities for their own benefits. All payments are transparent now. There are no more hidden fees. Tenants can plan their future much better, even if rents go up slightly, which OpenRent does not believe will happen anyway.

    2. Well they still do pass on the cost of activities such as tenant referencing even after 01.06.2019. My agency makes me pay £195 for referencing my wife to move in with me to a company that is located at their address and has their fax number as contact, no other details found on them on internet, I don’t think this is legal, but they are doing it.

    3. ‘Vibrators’
      Running a business costs money like every single other business.
      Not all costs can be recovered or ‘factored in’, this is why businesses record losses, beneficial for tax.

      YES, this new law will cost you, if you continue down the road of using referencing agents (that charge you) and other services that cost you money.
      It’s up to you how you run your business, but may I suggest you do away with third party referencing…and try to reduce your costs…just like other businesses!!
      It’s not for the tenant to cover the costs of your business, they pay enough in rent.

  50. SHT Rent levels are market led and influenced by many factors – such as locality and comparables. Setting a 5wk deposit max is not good. I have charged 1.5 month’s rent for years and tenants have always accepted this as fair. Landlords require to give 2 months notice for possession and often tenants at this point stop rental payments. So when leaving the landlord is already losing owed rent which the deposit will not cover. This happens all too often, and chasing tenants owing money, who have left is a waste of time and expense, usually done through the Courts. I have, over 10 years as a ‘fair and reasonable’ landlord lost over £9000 in unpaid rent although having County Court and High Court Judgements & Enforcement Orders every time. Usually these ‘rogue, unscrupulous’ tenants leave properties in a grim state, requiring high renovation costs before re-letting again. I don’t paint every tenant with the same brush, but because of a low %, landlords are often faced with unnecessary costs. Likewise some Landlords are bad, however all Landlords (if they let directly) must now be licenced (in Wales – Rent Smart Wales affiliated). So the sector is now controlled and vetted by statute. The same should apply to tenants – who should be affiliated to a statutory body which provides referencing and insurance cover incase they default on their Tenancy Agreement. agreement with a Licenced landlord.

  51. Hello, I’m a letting agent. With the tenant fee ban, if our tenants fail the referencing based on bad credit, ccj’s etc, can I then hold back part of their holding deposit to cover my costs (I pay a referencing company for each application)? I know you can hold back some of the deposit for them failing the right to rent however where do we stand if the tenant isn’t financially able to take on the tenancy? Thank you.

    1. You can not charge these referencing ‘fees’ to start with.
      So by retaining some or all of the holding deposit, you are in effect CHARGING for referencing.
      If you are charged yourself for referencing, then may I suggest you reference the old fashioned way, by a previous landlord reference. Bingo, no cost.
      This law is excellent, it captures so many indirect problems and unfair restrictions that tenants faced.

  52. Whilst I totally agree some agents / landlords charge unreasonable fees, I do not consider it unreasonable to charge for references at cost, which as a landlord is all I have ever charged.

    Contrary to some comments in this thread, banks DO charge an application fee for mortgages to cover credit checks etc, and large deposits are required for their investment protection.

    Tenants also need to appreciate that private landlords are running a business, not a charity, and that both need each other.

    I would suggest that, if tenants do not wish to pay the landlord for referencing, they should prepare their own references, credit reports and proof of ‘right to rent’ prior to viewing properties. Conversely if tenants do not wish to make any effort in this mutually beneficial contract, they should restrict their accommodation search to social housing or housing associations.

    I would also agree the abolition of Section 21 is reasonable in an effort to provide better security of tenure for tenants, BUT only if the government streamline the court procedures for Section 8 claims to provide a fair balance against unscrupulous tenants.

    At the present time there is a distinct imbalance of risk and responsibility in the governments approach to PRS legislation. Landlords take all the risk and expense of owning / maintaining property, the risk of a bad tenant, i.e. unpaid rent, damage to property, legal expenses, loss of rent during legal proceedings, extended vacancies, etc.

    What actual risk does a tenant take? Absolutely none, since S21 and tenant fees is being abolished.

    In response to the authorities and housing associations that believe private landlords have a social responsibility to provide housing under their biased rules – build more social housing and manage the homelessness yourselves!

    I have no objection to reasonable regulation in the PRS, but it has to be fair and balanced for both parties, and at present it most certainly is not.

    A question I have for Openrent is, can a bond guarantee insurance scheme premium be charged to tenants, in lieu of a monetary bond deposit? I would suggest this is a better approach to aid tenants with limited funds and landlords requiring better security than one week’s rent. I would certainly prefer this as deposits currently held in Deposit Protection Schemes, in particular the one with that (initial) title, are notoriously unreliable security in respect of the schemes biased approach to tenants and their management ineptitude.

  53. I notice the following clause appearing from agents on Rightmove: “a holding deposit is payable BEFORE viewing and will be retained if the tenant withdraws at any stage”. This is outrageous. A week’s rent to view a property?

  54. I have read many of the above comments from both tenants and landlords with interest. For context: I am a landlord with 8 properties. This is my sole source of income. I seek to make a comfortable/adequate living for myself, but also voluntarily am a member of the Residential Landlords Association. I try in all aspects of my business to subscribe to best practice. In the 5 years since I set my business up I have witnessed both bad practice by landlords (not myself), and by tenants. It is a frequent misconception that landlords are all super rich. I for one am not. Im glad that charges for tenants have been reduced. I was startled when I first encountered the level of fees tenants were encountering. However, just as there are bad landlords, there are bad tenants. Fortunately my experience of these have been limited but memorable. Tenants who in 6 months ruined every worktop in a newly fitted kitchen, left indoor furniture out on a balcony in the rain to rust, didnt report a leak to the toilet so the entire wooden flooring in a flat was rotten and ruined.

    So my point is that there is bad and good on both sides. No system will ever be perfect. I now let direct so I can meet and assess tenants for myself. Some have lied about their eligibility to pass referencing but generally I have found dealing face to face with tenants more successful. Similarly they prefer dealing directly with their landlord, rather than protracted communication through an agent. No system will ever be perfect but you have to make the best of the position you are in. You either work with the system for good or ill or get out. I for one am glad that its the business route I decided to take even though Im not the billionaire people imagine me to be!

  55. I have to say that, as a private landlord who does not use a letting agent, I am pleased their exorbitant charges are being banned. I see one major problem though as, in my experience, all too often tenants refuse to pay the rent in the past month or 2 of a tenancy saying they need it for their next deposit which invariably has to be paid before I refund their deposit that I hold. I have in the past requested 2 months rent as deposit and even then can be left with nothing to cover repairs if they are 2 months in arrears and of course they cannot be evicted until at least 2 months in arrears plus time taken to get to court if necessary. Most tenants know this and some will use it to not pay rent when they intend to leave the property especially if they have caused damage and know they will lose some or all of their deposit.
    Apologies for rambling on but my question is can I charge 2 months in advance for rent as well as a months rent as deposit? This would at least leave me with something if a tenant decides not to pay the last 2 months rent or worse which I have experienced in the past.

  56. Is it legal for landlords to ask for a deposit of say 6 weeks rent (£500) before the tenanat is allowed to see the property. This is what a landlord in Leicester wanted us to do. They said they would repay the money if we didn’t want it. Crazy! Not been to see it of course.

    1. Yes, that would be a prohibited payment, as it is over the one week cap on holding deposits. The landlord could be fined £5,000 for this in theory.

  57. Hi,
    My contract ran out on the 15/8/2019 & the landlord is charging me £165 for a check out inventory, is he allowed to do this ?
    Thanks

    1. Hi James, if that charge is described in your tenancy agreement, then yes. He can still charge for this until 1st June 2020.

      Sam

  58. My agent said this about a licence agreement with them.

    “As your bills are included in your monthly fee under the Licence Agreement we are permitted to charge £150 as a contribution to council tax under the new Tenant Fee Act 2019.”

    Is this right?

    Please help!

    1. Hi William, rent can still be inclusive of bills, yes. However, if you have a License Agreement then you are probably a lodger, not a tenant, and therefore different rules may apply to your situation.

  59. I was a landlord in Brighton and Blackpool for 10 years, with a total of 10 letting properties, and never used an agent in Brighton as we lived here. Many people letting out property seem to forget to mention that profit can come in three ways; 1 Property value can increase; 2 excess over mortgage and running costs is profit ; 3 The rent is actually buying your property for you.
    My partner and I had the attitude that we would not rent out a property we would not live in, we rented at lower rates than equivalent rented properties, and we personally conducted viewings and vetted applicants, and everything was carried out legally and correctly. It worked very well for us, and our tenants. Too many landlords nowadays seem to want more profit year on year, treating tenants badly and getting away with it. These Laws do not go far enough to my mind, especially in the overpriced letting areas of the South.

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