Industry Insights

The Tenant Fee Ban: Landlords Beware!

9th November 2017


Last week the government published its response to the consultation on banning letting agent fees to tenants along with a draft bill.

The level of fees charged by letting agents and some landlords are often not clearly or consistently explained, leaving many tenants unaware of the true costs of renting a property.

The draft Tenant Fees Bill generates a complete blanket ban on fees charged by agents (and landlords) for the creation, renewal or continuation of an AST or license.

This is much harsher than was anticipated. Many thought the ban would be in the form of a cap or upper limit on tenant fees, rather than a full ban.

Tenancies which fall outside of the Housing Act 1988 will not be covered and it appears that company lets have not been included in the new rules.


There is a list of permissible fees that agents and landlords can still charge to tenants.

Those permitted include fees for breaching tenancy agreements and fees for losing keys.


Enforcement will be through trading standards officers, who have a duty to enforce the legislation so that agents can complain about other agents who are not playing by the new rules.

A civil penalty of £5,000 is payable initially for a breach of the ban on letting fees, but a repeated breach would amount to a criminal offense. However, civil penalties of up to £30,000 can be issued as an alternative to prosecution.

If the offense is by a company, the directors can be made liable too.

There is also a list of anti-avoidance provisions to stop agents and landlords getting around the ban.


The government also launched a consultation on making membership of client money protection schemes mandatory for letting and managing agents that handle client money. This will give landlords and tenants greater financial protection and confidence that their money is safe.


The bill will also amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla - so that all fees being charged are clearly set out on all websites.


The bill limits tenancy deposits to the equivalent of 6 weeks rent. This is an increase on the proposed one month which many agents and landlords considered to be not long enough.


The bill has not yet been laid before parliament, so it is not in force yet.

But what is known already is that many agencies, especially the large corporates, make a significant amount of their revenue from tenant fees, and some of the big corporates have already started passing these ‘lost’ fees onto landlords in a bid to stay alive, even before the legislation has officially kicked in.


But at Home Hub Southampton we like to be different!

Our fees are already all-inclusive and transparent but we are going a step further...

If you put your property on with us fully managed before the end of 2017, we will FREEZE your prices for up to the next 5 years! That’s right! Lock in now, and you will not be subject to any fee rises in the next 5 years!

To contact us to find out what we can do for you or to find out more, e-mail or telephone Sarah on 07793 354635 quoting PRICEFREEZE17

Posted by:

Sarah Smith

Home Hub Southampton


SPA Committee: Committee Member

Our 2018/19 Charity we are supporting is the Society of St James - a Hampshire-based homelessness charity, providing accommodation and support to over 2500 people each year. Thank you to all our members for your fund raising help thus far.

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