If you’re a renter, the idea of no letting agents fees when you move house probably sounds pretty good. And this will soon be a reality, as a new bill will ban letting agents fees to tenants.
The Government announced the Tenants’ Fees Bill in last week’s Queen’s Speech (21 June). It means that if the bill becomes law, landlords won’t be able to charge tenants for letting agents fees – they’ll have to pay them.
This might sound like a good thing if you’re a renter, as it means one less bill for you. But how will the Tenants’ Fees Bill really work and when will letting agents fees be banned? We’ll take you through all of the facts.
What is the Tenants’ Fees Bill?
We first heard that the Government were looking to ban letting agents fees in the 2016 Autumn Statement. Back then, the Chancellor was just considering an end to these fees for tenants.
But now it looks like it will actually become law, as the Government said it will publish a draft bill ‘later this year’. MPs will still have to vote on it to go through, but all of the major parties committed to ending letting agents fees in their manifestos before the 2017 General Election.
If the Tenants’ Fees Bill does go through, it means that landlords won’t be able to charge you for letting agents fees. The landlords themselves will have to foot the bill for any such fees.
The Government says that the average total cost for letting agents fees is £223. However, another survey found that some renters could pay as much £813 for a two-person property.
Will a letting agents fees ban help you?
An end to letting agents fees might seem like a good idea if you’re a renter, especially if you’re on a tight budget. After all, it means you could save money if you don’t have to pay these fees anymore.
However, some landlords are predicting that the move won’t actually save tenants any money. They say that landlords would lose some £300 million and that they might seek to reclaim the costs by pushing rents up.
If landlords do this, it means you wouldn’t be any better off financially after a letting agents fees ban. And if you plan to stay in a property for a long time, you might actually end up worse off as your rent will be higher over a longer term.
But this doesn’t necessarily mean that the end to letting agents fees is pointless. It would make it easier for you to see how much a rented property would cost before you moved in. And you’d also be able to quickly compare different properties, without having to work out whether extra fees would make a difference.
So while the letting agents fees ban might not help renters as much as it first seems, it could still make budgeting for household costs simpler.
Top tip: if you’re an existing tenant, look at your rental contract to see how often your landlord can increase your rent. You could also speak to your landlord about fixing the rent or putting a limit on when they can review what you pay.