What are letting agent fees and when will they be banned? Changes to protect tenants outlined in Queen’s Speech
Tenants can pay up to £700 in letting agent fees... but all this is set to change
THOUSANDS of renters get stung by letting agent fees every single year, costing them hundreds of pounds, but all this is set to change.
The Queen's speech confirmed that landlords will no longer be able to pass the cheeky costs onto their tenants - but when does the ruling come into play? Here's what you need to know.
What are letting agent fees?
When a landlord rents a property through a letting agent, the company charges them a number of fees for their services.
However, these fees are nearly always passed onto the tenant - meaning they have to pay hundreds of pounds in extra charges when signing for a property, on top of their security deposit and rent.
These charges often include a mandatory inventory fee, tenancy reference fee, renewal fee, and the agent's own admin fee.
The average tenant pays £233 in fees, but the costs have spiralled over the past five years - with some people now paying a huge £700.
With many people now moving home every year, this can put a huge strain on the bank balances of families and individuals.
Research by the Citizens' Advice Bureau (CAB) found that 42 per cent of renters had to borrow money just to to pay their fees.
People renting directly through private landlords tend to pay minimal, if any, fees.
When will letting agent fees be banned?
Details of a new Tenant's Fees Bill was announced in the Queen's Speech on June 19.
A ban on letting agent fees was previously proposed in the 2016 Autumn Statement by Chancellor Philip Hammond.
It was also a pledge in the Conservative Manifesto, ahead of the 2017 snap General Election.
The law has not yet been introduced, but a government spokesman a draft bill will be published "later this year".
It will then have to be passed in Parliament, before it is actually enforced.
The new bill will only apply to those renting in England. Letting agent fees are already banned in Scotland.
Will I be able to recover my letting agent fees?
The new bill will also tenants to recover any fees which have been charged unlawfully.
However, this is unlikely to apply to any fees which you have already paid - or pay in the coming months, before the bill is finalised.
Will a ban on letting agent fees hike up rent prices?
The new bill will not affect the fees letting agents charge - it will just pass the responsibility for paying them onto the landlords.
Some worry that landlords would simply raise rents to cover these costs.
"A ban on letting agent fees will cost the sector jobs, make buy-to-let investment even less attractive, and ultimately result in the costs being passed on to tenants," David Cox, ARLA Propertymark chief executive, .
