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1 Jun 2020

Letting fees ban extended to all tenancies: could renters be due a refund?

Discover how the cap on deposits and ban on admin fees in England works

The letting fees ban in England applies to all tenancies from today, meaning some renters could be due a refund on overpaid deposits.

During the year-long transition period, England's letting fees ban only applied to new tenancies and some renewals, meaning those with older contracts could still face high administration charges when renewing or moving out. But from today, that's changed.

Here, Which? explains how the ban works, and the consequences landlords and estate agents face if they fail to adhere.

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What is the letting fees ban?

The letting fees ban was launched in England on 1 June last year. It meant landlords and estate agents could no longer charge tenants administration fees for services such as referencing, inventories and drawing up contracts.

It also capped holding deposits at one weeks' rent and upfront deposits at five weeks' rent (or six weeks if the yearly rent is more than £50,000).

How will this change affect tenants?

Until now, tenants who signed contracts before 1 June 2019 could still be hit by high fees when renewing their contract or moving out at the end of their tenancy. Now, even if such fees are stated in the contract, they can't be enforced.

The deposit cap being extended to all tenancies means renters who originally paid six weeks' deposit when signing their tenancy agreement will be entitled to a sixth of their money back from their landlord or managing agent (unless they pay more than £50,000 in rent each year).

It's the landlord's or letting agent's responsibility to inform you if you've overpaid, but there's no harm in getting in touch yourself to ask for a refund if you're owed one.

What fees can landlords charge?

The letting fees ban stopped landlords and agents charging uncapped fees for many services, but landlords can still charge tenants fees for the following:

  • Up-front deposits - capped at five weeks' rent (or six weeks if the annual rent is more than £50,000).
  • Refundable holding deposits - capped at one weeks' rent.
  • Default fees - if the tenant is at least 14 days behind on rent or loses their keys.
  • Changes to tenancy agreements requested by tenants - capped at £50.
  • Early termination fees - capped at the landlord or agent's actual incurred cost.

Tenants will still need to pay for utility bills and council tax if stated in their tenancy agreement.

What happens if landlords fail to adhere?

Landlords and agents who breach the rules could face fines of up to £5,000 for each offence.

Repeated offenders face being summoned to court and maximum fines of £30,000.

Since the ban came into force last June, The Property Ombudsman has dealt with 341 complaints from tenants who claimed letting agents have broken the rules.

Does the ban apply elsewhere in the UK?

This ban only applies in England, but Scotland and Wales also have their own bans on letting fees.

Letting fees have been outlawed in Scotland since 2012 and Wales launched its new rules shortly after England, in September 2019.

No fees ban is currently in place in Northern Ireland.

Renting and the coronavirus: your rights

Many landlords and their tenants are facing financial difficulties due to the outbreak of COVID-19.

The government has offered assistance to those affected by allowing landlords to take out mortgage payment holidays, which they can then pass on to tenants who are struggling to pay.

You can find out more about the measures in our stories on tenant rights during the coronavirus outbreak and the challenges facing landlords during COVID-19.