Landlord costs could increase due to legislation

A new ban on tenant fees could push costs of more than £80 million onto landlords, government figures have shown.

The tenant fees bill, which was published on 2 May 2018, includes a ban on all fees charged to tenants apart from rent, deposits, and certain necessary costs.

A government impact assessment confirms that “the main costs fall on landlords and letting agents” as a result of the changes, with landlords expected to absorb £82.9 million in the first year.

Letting agents also face a greater cost, estimated at £157.1 million for the same period of time.

Aside from rent and deposits, landlords and letting agents will only be able to charge tenants for:

  • a change or early termination of a tenancy when requested by the tenant
  • utilities, communication services and council tax
  • a default by the tenant, such as replacing a lost key.

As well as banning fees, the bill will introduce a cap on holding deposits of up to one week’s rent, and security deposits at no more than six weeks’ rent.

Fees for a change to the tenancy will also be capped at £50, unless the landlord can prove the change incurred greater costs.

Those in breach of the ban could face a fine of £5,000 for a first offence, with further offences within five years resulting in either penalties of up to £30,000 or prosecution.

The new rules are due to come into force next year as the measures pass through parliament.

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