“Generation Rent” no longer have to pay letting agency fees when renting a flat or house – here’s everything you need to know.
Good news is usually a rarity in the rental sector, but this year has already seen vast – albeit, way overdue - improvements.
They come at a crucial time for the 4.5 million privately rented households around the country. Living in a rented home has never been more precarious, with rates in London alone rising by 38% between 2005 and 2016. Along with this increase in non-affordable private renting, the number of people who rent within the sector in the UK has doubled in size since 2002.
Basically: we are a generation of renters, and policies need to support us more.
In April, it was announced that the government planned to abolish Section 21 evictions so that landlords can no longer end tenancies with just eight-weeks’ notice after a fixed-term contract has come to an end. This means that less people are likely to end up homeless and on the streets.
The second positive happened on Saturday (1 June) with a new law banning tenancy fees under the Tenant Fees Act.
Yep, letting agents are no longer allowed to charge those absurd fees for viewings, credit checks, references and setting up a tenancy. According to Citizen’s Advice, renters have collectively been paying around £13 million a month in these fees, which works out at hundreds of pounds each.
However, the new law does not mean tenants will not have to pay any upfront fees at all. They will still be expected to pay the first month’s rent along with a deposit.
The government decided on a rule that means security deposits will be limited to five weeks’ rent for properties costing less than £50,000 a year to rent, or six weeks for higher-value renting. Holding deposits are capped at one week’s rent.
And then there are a few other potential costs to take into consideration.
There can be a charge for lost key replacement. And, if rent is outstanding for more than 14 days, agencies can impose a penalty limited to 3% higher than the Bank of England’s base rate.
There might also be a fee of around £50 if a tenant requests a change to the tenancy, or if a tenant wants to leave the contract early.
It’s worth noting that those who signed a tenancy agreement before 1 June may still face fees in their contract for the next 12 months, including renewal fees.
Although there is some worry that the letting fees ban will result in higher rental rates, housing charity Shelter have said that in Scotland – where the ban has been in place since 2012 – increases were “small and short-lived”.
It is still to be passed in Northern Ireland.