Date Published 28 May 2019
From 1st June application fees to tenants are being banned in England & the government has also announced a cap on deposits to 6 weeks rent or 5 weeks if rent is under £50,000 a year.
Lord Nick Bourne of Aberystwyth, speaking in the house of Lords says ‘we intend for the provisions of this bill to come into force on 1st June 2019. This would mean that the ban on lettings fees would apply to all new tenancies signed on or after this date.
It has been clear throughout that this is a bill that we all support, and one that will deliver important changes to the private rented sector, improving lives for millions of tenants.'
Basically, all payments are essentially prohibited unless the payment is ‘permitted'. Rent & deposits are permitted under The Act but even they have restrictions. All payments in connection with a tenancy of housing in England are prohibited unless they are specifically ‘permitted' under the act.
Permitted payments are;
• Tenancy deposit
• Holding deposit
• Payment in the event of a default
• Payment on variation, assignment or novation of a tenancy
• Payment on termination of a tenancy
• Payment in respect of council tax
• Payment in respect utilities etc
• Payment in respect of a television licence
• Payment in respect of communication services
While this all seems positive for potential tenants, agents do have to charge someone for admin fees. This means that landlords are going to see a slight increase in fees which then may be passed onto the tenant via a rent increase so it's good for tenants to be aware of that.