As it stands, tenants are subject to significant charges on all sides whenever they embark on renting a new property. As well as deposits, tenants have to cover everything from tenant fees to contract renewals. The expense of renting is currently so high that it’s becoming an impossible goal for many, especially those attempting to rent solo.
But, that looks set to change on June 1st, when the tenant fees act comes into force with the hopes of reducing deposits and eliminating fees. The UK will roll out these changes first, with Wales set to follow by September.
There has, of course, been much discussion about what a change like this could mean for the rental market. While it’s difficult to judge, a quick look at the facts can at least let us know what exactly this tenant fee act involves.
A total ban on fees
The ban on fees is the most substantial change this act promises, and it’s one which could open the rental market for many. Estate agent fees have been rising in recent years, with many companies charging amounts which renters struggle to afford at an already expensive time. And, it’s for this reason that the tenant fee act is set to see the banning of fees for-
- Credit checks
- Cleaning services
In fact, the only fees which will be exempt are holding deposits, rent, and charges for defaulting on contractual agreements.
Even then, regulations are set to cap holding deposits to one weeks rent, which must be repaid if a tenancy doesn’t commence in fifteen days.
Restrictions on rent and landlord deposits
There are also restrictions coming into place for the amounts landlords can charge, especially with regards to deposits. As it stands, these are the most expensive aspect of renting and are the hardest thing for many renters to save towards.
As of June, though, deposits look to become more achievable. That’s because there will be caps on how much a landlord can charge. If annual income is above £50,000, a landlord can’t ask for more than six weeks as a deposit, with that amount dropping to five weeks if annual rent is below £50,000.
Meanwhile, rental changes focus around consistency and dictate that a landlord can’t charge higher amounts at the start of a tenancy.
What this means for landlords
For the most part, these changes are focused around tenant protection, which has left some uncertainty as to what this means for landlords. Many have even stated that the act could result in a reduction in the landlords who can afford to continue.
Undeniably, there are fears about increased rent rates, especially if estate agents increase charges on landlords to cover their losses. That said, the consensus on the issue seems to remain that rental rates shouldn’t skyrocket due to the competitive market in which landlords are operating. As with any change of this kind, though, only time can really tell what the long-term implications of this act will be.