Measures in the bill include:
- Capping holding deposits at a maximum of one week’s rent
- Capping the amount that can be charges for a change to tenancy at £50 unless the landlord can prove greater costs were incurred
- Introducing financial penalties for breaches of the ban
- Preventing landlords from recovering possession of properties via section 21 procedures unless they have repaid any unlawfully charged fees
- Amending the Consumer Rights Act to specify that letting agency transparency requirements should apply to property portals
The government believes that by removing costly letting fees tenants will save around £240m a year.
James Brokenshire (pictured), who was this week appointed housing secretary, said the tenants should not be “stung by unexpected costs” and argued the bill would help make renting “fairer and more transparent”.
He continued: “The Tenant Fees Bill will stop letting agents from exploiting their position as intermediaries between landlords and tenants, and prevent unfair practices such as double charging for the same services.
“It will also help to increase competition between agents and landlords, which could help drive lower costs overall and a higher quality of service for tenants.”
The bill only applies to England and Wales, and is not expected to be introduced into law until next year.
David Cox, chief executive of ARLA Propertymark, commented: “We do not believe the Bill will achieve its aims, as our own research last year demonstrated that tenants will end up worse off and banning fees will not result in a more affordable private rented sector.”