Cutting Costs: How the Tenants Fees Act 2019 will change the letting of properties
The imminent arrival of the Tenant Fees Act 2019, approved by Parliament on 12 February 2019, will have a discernible and immediate impact on the rental market in England (it has the ability to be extended to Wales, but no date for this has yet been given).
Ever since being passed, the Tenant Fees Act, or TFA to its friends, has been sitting in the shadows, waiting for its moment of glory on 1 June 2019 when it is due to come into effect.
Tenants, Landlords and Letting Agents will all need to take stock of the act, and the changes it makes to fees which are allowed, or prohibited, under rental agreements.
The most notable of these changes for permitted fees (found in schedule 1 of the TFA) are those concerned with payments of deposits and holding deposits. The former have been capped at the equivalent of five weeks rent for properties where the annual rent is £50,000 or less, or six weeks rent for those with a higher annual rent. The latter have been capped at just one week’s rent.
Amongst the prohibited payments, which we suspect are more likely to excite interest, at least among tenants, are administration fees and credit check fees. For landlords it likely means higher fees, however, and it remains to be seen how this will affect the overall private housing market.
Enforcement of the prohibitions will fall to local authorities, who will have the power to levy financial penalties against parties found to be in breach. Should any actions be commenced, they will doubtless draw the keen attention of both legal and real estate professionals.
Overall whilst these changes may not represent a great reduction in costs charged, it is nevertheless a significant aspect of the sea change in the statutory approach to tenancies. Combined with proposals to remove section 21 evictions, and simplify their section 8 counterparts, the TFA is part of the overall attempt to improve conditions for tenants. For younger tenants, and in many cases, their supportive parents, it will doubtless come as a welcome change. For landlords, perhaps not so much.
The impact of the above changes is yet to be known, but rest assured that the experienced team at Askews will be on hand to provide any legal assistance you may require.
