Admin fees set to change in the lettings market28/05/19
From 1st June, the lettings market is set to change. A law is coming into place which bans letting agents and landlords from charging tenants admin fees. Many lettings agents and landlords have been taking advantage of the current legislation by charging tenants unfair and excessive admin fees.
What can landlords and agents charge tenants for now?
From June onwards, the only costs landlords and agents will be able to charge tenants for will be:
- Utilities and council tax (if included within the tenancy)
- A refundable deposit, capped at six weeks' rent. The cap could be five weeks' rent for properties where the annual rent is less than £50,000, under an amendment put forward in the House of Lords.
- A refundable holding deposit to reserve the property, capped at one week's rent.
- Changes to the tenancy requested by the tenant, capped at £50 (or "reasonable costs").
- Early termination of the tenancy requested by the tenant.
- Defaults by the tenant, such as fines for late rent payments or lost keys. These must be "reasonable costs", with evidence given in writing by the landlord or agent.
How might agents and landlords change their services?
There is much speculation as to how agents and landlords may re-balance the books once the new legislation takes effect, one method may be to increase the rental fee.
Interestingly, a number of large firms are reconsidering whether they will be prepared to offer any landlords a let-only service in future on the basis that without the tenant fee, the service will no longer be profitable. This will be a massive change for the letting industry to get to grips with.
Whether you are a landlord or a tenant, contact our team for the latest advice on the lettings market.
Andy Lowe, Assistant Surveyor