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Government drafts bill to ban letting fees

A draft bill that could see letting fees banned and significant fines handed out to agencies that impose extra costs on tenants has been introduced to parliament today.

It is hoped that the draft Tenant Fees Bill will help renters by ending costly upfront payments.

Tenants are unaware of the true costs of renting a property, with charges frequently being unclear to renters.

The government hopes that its approach in banning letting fees for tenants will improve transparency, affordability and competition in the private rental market, and prevent agents from double charging tenants and landlords for the same services.

The draft bill proposes the creation of a civil offence with a fine of £5,000 for an initial breach of the ban on letting agent fees, and a criminal offence where the person has been fined or convicted of the same offence within the previous five years.

Civil penalties of up to £30,000 could be issued as an alternative to prosecution.

Trading Standards would be responsible for enforcing the ban and making provisions for tenants to be able to recover unlawfully charged fees.

The draw bill also sets a cap on holding deposits at six weeks’ rent.

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 comes as part of the government’s wider plans to improve the rental market, such as introducing measures to crack down on ‘rogue landlords’.

The measures in the draft bill are subject to Parliamentary scrutiny before they can be introduced into law.

Cllr Martin Tett, the Local Government Association’s (LGA)’s housing spokesman, said: “This ban on letting agent fees and a cap on holding deposits will bring much-needed clarity for the private rented sector.

“Excessive fees are a concern for tenants and councils, as they hamper access to the market and put pressures on other tenures, such as social or supported housing.  

“If the government expect local authorities to enforce the ban, it’s vital that they provide the resources and funding that will be needed in order to make such enforcement successful. 

“That means making sure up-front funding is provided to support Trading Standards, and that a national information campaign is undertaken to make tenants aware of the new rules.”

He continued: “A thriving private rented sector contributes to a balanced mix of affordable housing in communities, and we know that with the right measures, that can be delivered – but only if councils are adequately resourced to ensure their residents are fully protected.”

In addition to the draft bill, the government has also launched a consultation on mandatory membership of client money protection schemes for letting and management agents that handle clients’ money, which it says will give greater protection to both landlords and tenants.

The consultation, which starts today, will run for six weeks.


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