In his first Autumn statement, Chancellor Phillip Hammond announced a ban on letting agents fees in England that will begin “as soon as possible.” The Renters' Rights Bill - aimed at reducing the charges that letting agents can ask tenants to pay – had been making its way through the House of Lords.

The Bill, proposed by Liberal Democrat peer Baroness Grender, had also recently been amended to tighten up the terminology. Rather than requiring a ban on specific charges to tenants including reference checks, credit checks, administration fees and inventory fees, the amended Bill called for a ban on “all fees to the tenant from the lettings agency and specifies that charging a fee to a tenant would be an offence."

In his speech, Hammond side-stepped the legislation’s progress and told MPs: “In the private rental market letting agents are currently able to charge unregulated fees to tenants. We have seen these fees spiral, despite attempts to regulate them, often to hundreds of pounds. This is wrong. Landlords appoint lettings agents and should meet the fees. We will ban fees as soon as possible.”

Lucy Morton, head of agency at JLL, said: “Charges made by letting agents to tenants at the commencement of their tenancies should have been levied only to cover reasonable administration and referencing costs. However, this has been abused by some agents who have been overcharging for their gain and to the detriment of tenants.

“Reasonable charges including referencing costs may now be charged to landlords which in turn may then be added to the annual rent. It is essential that agents do not cut corners and fail to carry out stringent referencing checks.” According to the Government, the average fee charged to tenants has been in the region of £337.

We will continue to monitor developments and the impact this will have on new tenancy agreements as the Treasury’s small print is fully revealed.

To read another post about the United Kingdom Rental Market, click here.