It has been announced that the tenant fees ban will come in to force from 1st June.
The measures will fundamentally change the way many letting agents run their businesses and could see some stop trading.
Lord Bourne of Aberystwyth announced the measure as the Tenant Fees Bill passed through a third reading in the House of Lords and now awaits a final reading by MPs and then Royal Assent.
“We need to enable agents and landlords following Royal Assent to become compliant, but we intend for the provisions to come into force on 1st June, 2019.
“This would mean the ban on letting agent’s fees would apply to all tenancies signed after this date.
“The sector has been waiting for legislative certainty and agents now need to ensure that they are fully up to speed and taking steps to implement changes.”
The bill passed the Lords without any major changes but is subject to amendment by MPs, although this is unlikely.
Measures in the bill include:
- Landlords and letting agents only allowed to charge fees for replacing locks, tenancy changes requested by the renter and bills such as utilities and Council Tax
- Holding deposits are capped at one week’s rent
- Security deposits are limited to five week’s rent
David Cox, chief executive of ARLA Propertymark, said, “With the Tenant Fees Bill completing its passage through the House of Lords this afternoon, it appears the tenant fees ban will come into force on June 1, 2019 subject to parliamentary scrutiny in the House of Commons.
“This now gives agents the legal certainty they need to prepare for a post tenant fees ban world. To learn about the intricacies of the legislation.”
David Gonsalves, chief executive of lettings company Belvoir, predicts up to a fifth of independent letting agents could close as a result of the fee ban.
“This reflects a contraction in the number of agents in the sector not only amongst the smaller but also many of the larger independent agents, as the impact of the number of landlords selling their properties due to a less favourable tax regime as increased regulation on lettings agents takes effect,” he said.
For more information on what letting agents can expect this year see A review of 2018 and preview of 2019 for letting agents by the Property Redress Scheme, a Hamilton Fraser company.