Draft Legislation Published to Ban Letting Fees in Private Rental Sector

Draft legislation which is set to shake up the private rental market has been published. The legislation will see letting fees banned for tenants in England. Those landlords found guilty of charging them will face a fine of up to £5000.

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A harsher punishment will be meted out to those landlords who break the ban twice in five years: they could face a criminal prosecution or a civil penalty of up to £30,000.

Tenant Protection

As part of this new initiative, Sajid Javid, the Communities Secretary, has announced a consultation exercise which aims to ensure that both managing and letting agents in Gloucester and throughout the country become members of client money protection schemes. According to Javid, this will require deposits to be safely ‘banked’ with the scheme, providing tenants with confidence that they will be compensated if the money is not returned to them at the end of their tenancy.

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The scheme – which is welcomed by alexclarkglos.co.uk – was first announced in the Autumn Statement of November 2016 by Chancellor Philip Hammond; this was corroborated in the Conservative manifesto ahead of the 2016 election, where the party assured voters it would deliver its promises.

According to a survey by the English Housing Survey, fees are around £223, although the housing charity Shelter has uncovered that one in seven tenants pay a sobering £500 each.
The government has said that it is committed to ensuring the housing market works for all. Javid said that unwelcome fees are not affordable for many tenants and the system needs to be tightened up so paying rent and being assured of a refundable deposit go hand in hand. The initiative aims to make renting a more attractive prospect and safeguard tenants against questionable landlords.

The new measures are part of a draft Tenant Fees Bill. After scrutiny in Parliament, it will be introduced on to the statute book and become law.

Industry Backing

Alongside the government, landlord bodies, including the Landlords Guild, are backing the scheme, saying it will offer more transparency.

The consumer organisation Which? is backing the government’s new stance on the private rental market, saying that the current system is both stressful and expensive. The new scheme, it says, will reduce the anxiety over money when renters move house and will help control letting agents.

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