When looking to rent a flat or house in the private rental sector, by yourself or sharing with others, it’s important to be aware of the fees you can expect to incur. Likewise, it’s useful to know what you should not be charged for, to help you avoid unnecessary extra fees and costs. For full guidance on this, we recommend completing our online learning module Signing a Private Housing Contract, Next Steps.
In 2019 a series of changes to the law were made around renting and fees in the private sector. We’ve put together this updated information for you to refer to when searching for your new home and finalising your contract. These changes to the law will affect you if you’re about to start a new housing contract or if your renewing an existing contract by staying on for another year.
In this article we’ll tackle:
- Which fees are banned?
- What I can be charged?
- What costs can be deducted from my deposit?
- I paid a deposit of 6 weeks' rent. Will I get a refund when I renew my tenancy?
- Do I still have to pay the check out or inventory fee if it’s stated in my contract?
- Can the landlord increase the rent for the first few months of the tenancy to cover lost fees?
- I signed a contract prior to 01 June 2019 but my tenancy started after 01 June. Can I get a refund?
- I’m having an issue with housing fees and need further support
Which fees are banned?
The Tenant Fees Act 2019 bans certain fees charged to tenants by landlords, letting agents and student accommodation providers. Examples of fees that are banned are:
- Inventory fees
- Referencing fees
- Additional charges for having a guarantor
- Admin fees
- Fees for drawing up a contract
- Credit check fees
- Fees for new tenancies from 01 June 2019
What I can be charged?
Existing tenancies prior to 01 June 2019; these fees can be charged. Once you renew an existing tenancy, the ban will apply for the new fixed term or from 01 June 2020 – whichever is sooner.
Starting a new tenancy; you can expect to be charged:
- Holding deposit
- Damage deposit
- Upfront rent
Are there any other charges that I must pay in a new tenancy?
- The landlord or agent can charge you a reasonable amount for lost keys, however they must provide evidence.
- If you are more than 14 days behind on your rent, you can be charged interest limited to 3% above the Bank of England base rate.
- If you wish to assign your tenancy (transfer it to another person) Government guidance suggests a fee of £50, however, the landlord can charge more if they have evidence of their costs.
- If you wish to end your tenancy earlier than your fixed term, the landlord can only charge for reasonable costs incurred (for example, advertising costs, rent until they find a new tenant)
What costs can be deducted from my deposit?
Charges related to being in breach of your tenancy are deducted from your deposit when the tenancy ends. At that point you are able to dispute such charges. If the landlord seeks costs from you prior to the end of the tenancy, they will have to take you to court.
I paid a deposit of 6 weeks' rent. Will I get a refund when I renew my tenancy?
If you renew your tenancy, on 01 June 2020 any deposit money you have paid that exceeds 5 weeks' rent must be refunded. For example, if you paid £600 deposit and your rent is £100 a week, your landlord or agent must refund £100.
Do I still have to pay the check out or inventory fee if it’s stated in my contract?
If you left your tenancy before 01 June 2020 you will have to pay this fee.
Can the landlord increase the rent for the first few months of the tenancy to cover lost fees?
Landlords cannot do this however, they can set the rent at a higher rate for the whole period of the tenancy. It will be up to you to research the market for the best value tenancy.
I signed a contract prior to 01 June 2019 but my tenancy started after 01 June. Can I get a refund?
You cannot be refunded for any fees paid before 01 June. If you signed an agreement before 01 June, even if the tenancy starts later, none of the bans apply until you renew, or until 01 June 2020.
If the contract signed before the 01 June states that you have to pay a renewal fee, you would still have had to pay this fee if you renewed before 01 June 2020. However, the landlord wouldn't be able to include further fees, renewal or otherwise in a future renewal agreement.
I’m having an issue with housing fees and need further support
If you have any concerns at all about your experiences of finding accommodation either directly through landlords, student accommodation provider or letting agent, feel free to contact the Money & Housing Team and we will support you.