The Cost of Renting Could be About to Fall

the-cost-of-renting-could-be-about-to-fall
Added on February 1st 2019

Renters in England are just months away from paying less for their homes, as changes to letting fees and extra charges are set to pass into law.

Chancellor, Philip Hammond, announced these changes in 2017 and they include caps on security deposits and the abolition of administrative and credit check fees. The changes are now just waiting for Royal Assent and are expected to come into force on 1 June 2019.

The Tenant Fees Bill

This bill aims to reduce the expense faced by tenants who rent in the private sector by changing fees applied at the start of a tenancy and throughout. It’s hoped renters will save hundreds of pounds per tenancy.

Which fees are being scrapped?

Tenants in England pay between £200 and £300 in letting fees each tenancy. This administration, reference and credit check fees will now be abolished.

The fees bill also puts a cap on the amount of money a letting agent or landlord can ask for as a deposit, bringing it down to five weeks instead of six. For high-end properties – with an annual rent of £50,000 or more – the six weeks’ rent cap remains.

Who fills the gap?

Landlords and agents will have to foot the bill instead. This may mean, however, that these extra costs will be passed onto tenants in the form of slightly higher rents.

Whether or not this happens, though, the only costs tenants will have to pay is their rent, their deposit, their utility bills and council tax, as well as specific default charges and early termination fees.

What about default charges?

Default charges aren’t being abolished, but they’re going to change a lot.

Default fees allow landlords to recover costs incurred due to tenants being late with the rent or losing a key, to name two examples. These fees have, in the past, been used to hugely overcharge tenants. The housing charity, Shelter, claims that tenants have been charged tens of pounds to replace kitchen items that cost less than £5.

From 1 June, landlords can only apply default charges to cover the costs of lost keys and for rent, that’s more than two weeks late. This should make life easier – and cheaper – for a section of society that’s often vulnerable.

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