What are the new rules?Under the new Tenant Fees Act, letting agents are now significantly restricted in what they can charge tenants. Renters in England can no longer be charged fees for referencing, renewals, admin, or inventory, meaning that, for the most part, you’ll only have to pay rent and a refundable deposit. The government has also imposed thresholds, capping deposits at five weeks’ rent (or six weeks where the annual rent exceeds £50,000). With tenants in London paying an average of £420 in rent each week, this caps the average upfront cost of a deposit at £2,099. Meanwhile, refundable holding deposits – which are used to reserve a property – are capped at the equivalent of one week’s rent. And unless the letting agent can justify a greater expense, they can now only charge tenants a maximum of £50 for any amendments to be made to the agreement during the tenancy. If you are more than 14 days late on your rent, you can also be liable for a “default” fee, which is charged as interest – though it cannot be more than three per cent above the Bank of England’s base rate (currently 0.75 per cent) for each day that the payment has been outstanding.
To put this in monetary terms, for those in London, you would only be liable to pay £5.18 on average for the whole month your rent is late. “Don’t be fooled by any hefty charges for late rental fees,” says Tom Gatzen, co-founder of Ideal Flatmate. “Although, of course, it’s much easier to be a good tenant and pay your rent on time.” A default fee also applies if you need a lock or key fob replaced, but the letting agent has to provide written evidence to show that any costs are reasonable. Bear in mind that fees still apply if you want to terminate your contract early – in fact, that’s the one area of the letting industry where the charge remains variable. “Early termination of a contract can put a landlord at a disadvantage, and early termination fees can include any outstanding rent plus an additional charge from the letting agent,” says Gatzen. “Fees will be dependent on the agent, so try to avoid exiting early at all costs in order to dodge any unfair fees.”