Affordable housing is always a hot topic and in recent times it has been at the centre of successive Governments’ pledges to tackle the housing crisis, by providing affordable homes for Tenants in the private sector.
The introduction of the new Tenant Fees Act which came into force on the 1st June 2019 is expected by the Government to save Tenants across England at least £240 million a year.
The Government believes that this saving will be achieved, as the Act now introduces restrictions on what a Landlord and/or Agent can charge for. The Act states that any payments which are not expressly permitted by the Act are prohibited.
Letting agent fees for example, referencing, credit checks and inventory are now all banned by the Act. A Tenant’s deposit can now only be five weeks rent and the fees for varying or assigning the tenancy have also been capped by the Act, at fifty pounds.
Landlords who rely on rent deposits as security against any damage which a troublesome Tenant might cause, have now been shackled by the cap introduced by the Act. If you are a Landlord with multiple properties which you let to private Tenants, you may now find that you can ill afford to secure any risk of damage in view of the new statutory cap. It is clear that the Act is designed to reduce the upfront costs paid by Tenants to Landlords and Agents, but the Act fails to give Landlords any recourse upfront to secure their properties against the risk of damage.
The Act has failed to take the opportunity to recognise that Landlords do not always have perfect Tenants. It will be some time before we will be able to tell if Tenants will truly save anything under the Act as Landlords now may feel that they have no choice but to increase rental prices in order to meet the shortfall in security deposits which has now been created by the Act.
This blog was written by: Michael Dobson
DISCLAIMER: Please note that this post sets out the general position under the general law. It should not be acted upon in any specific circumstances without taking specific legal advice as to those circumstances. Also, it should not be relied upon, acted upon or treated as a substitute for specific advice relevant to particular circumstances. If you do require specific advice please contact us for assistance.