Renters still face forking out up to £2,500 for upfront deposits even after tenant fee ban
The Tenant Fee Act is due to come into force from June 1 and will cap the amount letting agents and landlords can charge for a deposit to five-week's worth of rent
THE rising cost of rent in England means that tenants will still have to stump up almost £2,500 for a deposit even after a five-week cap comes into force.
From June 1, the amount landlords and letting agents are allowed to charge for a deposit will be cut from six-week's worth of rent to protect tenants from extortionate upfront costs.
But new figures from Rightmove suggest that tenants still face forking out thousands of pounds for a deposit due to a lack of homes on the market, which has pushed up rents.
The property portal analysed rents for the first quarter of 2019 and found that on average tenants in London will have to pay a £2,415 deposit per property.
The region with the cheapest deposits at £630, where rent is £546 a month on average, is in the North East.
The cheapest deposit in London is in Rainham at £1,216, while, unsurprisingly, the most expensive are in the capital's richest borough, Kensington, at £4,065.
Ban on letting agent fees
THE Tenant Fees Bill bans letting fees paid by tenants in the private rented sector.
Housing charity Shelter says tenants shell out an average of £272 in fees, so this will save people a pretty penny.
But experts have warned that renters could still be open to being charged "default fees" - such as when they lose their key or breach their contract.
Under the rules, agents and landlords will still be allowed tenants fees associated with:
- a change or early termination of a tenancy requested by the tenant - but this will be capped at £50 unless the landlord or agent can demonstrate that greater costs were incurred
- utilities, communication services and council tax
- payments arising from a default by the tenant, such as replacing a lost key.
Landlords and estate agents will also only be able to recover "reasonable costs".
For example, they won't be able to charge tenants hundreds of pounds for a damaged item that actually only costs a few pounds to replace.
The property experts have blamed a lack of housing stock which is currently down 33 per cent annually in London, and 13 per cent across the rest of England.
Landlords are being squeezed after buy-to-left mortgage relief was scrapped in January this year combined with increased stamp duty on second homes, causing many to sell up.
Outside of London, rents have risen by 2.7 per cent over the past year, but fell 0.2 per cent during the first few months of 2019 to £796 a month on average.
Miles Shipside, housing market analyst for Rightmove, accepted that the upcoming tenant fee ban will help renters by reducing the cost of moving but only if bills don't continue to rise.
How to haggle with your landlord and bring down your rent
WHEN you first sign your tenancy agreement with your landlord your rent should be agreed either in writing or verbally.
To increase your rent your landlord must send you a section 13 notice which gives you a month's notice in writing telling you how much your rent will be increased by and the date when your rent will go up.
At this stage you should try to talk to your landlord and come to a fair agreement on how much rent you should pay.
Your landlord can only raise your rent if you agree to the increased price.
Matt Hutchinson, communications director for flatsharing website SpareRoom.com said that if you are a good tenant then you've got bargaining power.
"The first thing to bear in mind is that demand is lower at the moment than over the past couple of years.
"That means you’ve got a bit more bargaining power, especially if you’ve been a good tenant, as your landlord won’t want the expense and hassle of having to find another tenant and even potentially face a period with the property empty.
"Failing that, it’s worth seeing if you can get anything thrown in with a rent increase, such as minor bits of redecorating or any bills."
Landbay have a free rent check service to see how much rent you should be paying in your area.
You can find the rent check service
Find out more about how to haggle with your landlord to bring your rent down here.
He said: "It remains to be seen if the ban will be passed on in other ways such as increasing rents, and tenants will still need to find a pretty hefty rental deposit in many areas.
"What we really need now is more fresh stock for the rental market so that rents don’t continue to rise at the current rate we’re seeing, so perhaps it’s a good time for some investors to consider buying up properties to let out as the tenant demand is definitely there."
The Tenant Fee Act will stop letting and estate agents charging renters around £432 when taking on a new agreement - one letting agency even charged tenants £300 to view a property.
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But some experts warn that it could push up rents by £100 a year.
Renters are expected to spend a combined £154MILLION on tenant fees ahead of the ban.
That's why we've spoken to the experts to put together a guide on how to drive down the costs if you have to move before the ban comes into play.
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