Landlords are set to lose out on millions of pounds through a clampdown on rental fees after the Government yesterday announced further protections for tenants against letting fees, as part of the Tenant Fees Bill.
Under the new default fee provision, a landlord or agent will only be able to recover reasonable incurred costs, and must provide evidence of these costs to the tenant before they can impose any charges.
The move is designed to ensure that tenants in the private rented sector are not made to pay excessive fees for what is deemed to be ‘minor’ damages.
Other amendments to the Bill brought forward by the Government include taking steps to ensure tenants get their money back promptly, by reducing the timeframe that landlords and agents must pay back any fees that they have unlawfully charged.
The Bill, which will cap tenant deposits at a maximum of six weeks, is expected to save tenants around £240m a year.
Minister Rishi Sunak MP commented: “Tenants across the country, whatever their income, should not be hit with unfair costs by agents or landlords.
“This government is determined to make sure our housing market works and this new provision in the Tenant Fees Bill will make renting fairer and more transparent for all.”
But figures produced by the Department for Communities and Local Government earlier this year suggested that the proposed changes could result in landlords losing a collective £166m per year and letting agents up to £184m.
David Cox, Chief Executive, ARLA Propertymark, commented: “We’re disappointed but unsurprised the Tenant Fees Bill has passed the House of Commons.
“Over the summer, we worked with Daniel Kawczynski MP on his amendment to allow agents to charge up to £300. Although the amendment was unsuccessful, this shows that members involved in ARLA Propertymark’s campaign have helped MPs understand the unintended consequences of the tenant fee ban; with some MPs listening to the legitimate concerns of the industry.
“As the Bill moves into the House of Lords we will continue working to ensure parliamentarians understand the impact the ban will have on the whole private rented sector.”