Government to introduce bill on letting agent fees ban?

Inside Housing News Article 01/11/17 12:01 AM by Sophie Barnes

The government will introduce a bill to parliament today to ban letting agent fees.

The draft Tenant Fees Bill will set out the government’s approach to banning letting fees for tenants seven months after it first proposed the ban.

The government said evidence shows the level of fees charged are often not clearly or consistently explained, leaving many tenants unaware of the true costs of renting a property.

Today the government has also launched a consultation on making membership of client money protection schemes mandatory for letting and managing agents that handle client money.

These schemes are intended to give greater financial protection to landlords and tenants, giving them confidence that their money is safe when it is with their agent and they can be compensated if all or part of their money is not repaid.

Communities secretary Sajid Javid said: “This government is determined to make sure the housing market works for everyone. Tenants should no longer be hit by surprise fees they may struggle to afford and should only be required to pay their rent alongside a refundable deposit.

“We’re delivering on our promise to ban letting agent fees, alongside other measures to make renting fairer and increase protection for renters.”

The draft bill will cap holding deposits at no more than one week’s rent and security deposits at no more than six weeks’ rent, create a civil offence with a fine of £5,000 for an initial breach of the ban on letting agent fees, and create a criminal offence where a person has been fined or convicted of the same offence within the past five years. Penalties of up to £30,000 can be issued.

More than nine out of 10 tenants who responded to the government consultation backed the action to ban letting agent fees, with seven out of 10 of them saying these fees affected their ability to move into a new rented property.

Overall more than 4,700 responses to the consultation were received from a range of individuals and representative bodies from across the sector.