The Tenant Fees Bill: What you need to know
14th March 2019
14th March 2019
As the leading independent estate agent in Beaconsfield we like to ensure that our readers and clients have access to useful information and the latest news. Here, at Ashington Page we have a thriving Lettings Department which does a fantastic job of managing our large portfolio of properties, tenants and landlords – somewhat under the radar.
The Tenant Fees Bill
In May 2018 the government introduced the Bill to Parliament. In January of this year (2019) it was passed as law and announced that it will be in force from June 2019. The new law aims to reduce the number of costs tenants face when renting in the private sector. It will ban some of the fees traditionally paid to landlords and letting agents – you might think that this will affect many estate agents’ profit margin, and you’d be right.
However, at Ashington Page we have been at the front of this development and over the years have priced our fees at the lowest end of the spectrum to our competitors with a view to phasing them out entirely, so we won’t see a huge negative impact on our business.
Which fees will be scrapped?
The Government found that renters pay an average of £250 in letting fees during their tenancy. These are quite often labelled as different things by landlords and letting agents. When the law comes in to effect on June 1st we will see fees for credit checks, referencing fees and tenancy renewal fees being scrapped. Tenants will however be asked to pay one week’s rent as a holding fee, which can only be retained by the agent on certain conditions.
There will also be a cap on the amount that landlords can request for security deposits from six weeks’ rent down to five. There is an exception to this rule; high end properties where the annual rental is more than £50,000 will have a security deposit cap of six weeks’ rent as it is currently.
Not all fees will be banned. Default fees tend to be written in to the contract and are there to recover any costs to the landlord as a result of tenants’ actions. These will remain but will be subject to drastic changes to avoid exploitation. At this stage we know of three charges – to cover the cost of new keys or fobs in the event the originals are lost; when rent is more than 14 days late which will be capped at 3% above Bank of England Base Rate; and change of sharer can also be charged at a capped rate of £50 inc. VAT.
Who pays the remaining costs?
Many of the costs will now be picked up by landlords. This will mean that the only cost a tenant will be liable for is the rent, refundable deposits and bills. This will make renting a property more affordable and while landlords may increase their rents to cater for the extra fees, the cost is more manageable for the tenant as it is spread over the entire tenancy.
This is a landmark moment for people renting properties in the private market. The industry will become more competitive and this will drive the levels of service up. From our point of view we look forward to the competition as it will give us the opportunity to flex our lettings muscles.If you would like to rent a property in Beaconsfield or the surrounding areas or if you would like to speak to a member of our team about your options, make sure you give us a call on 01494 685518 or visit our website. You can also follow us on Facebook, Twitter, Instagram and LinkedIn.