Tenant Fees Act (2019): An overview

The Tenant Fees Act will come into force on 1st June 2019. At the centre of the new law is a ban on all tenant fees, including agency and any third party fees.

tenant fee act 2019

The guidelines from the government will come soon, but here’s what we know so far about the Tenant Fees Act (2019).

What does the Act comprise of?

Here are the key parts of the Act:

tenant fee act 2019

All Payments Are Prohibited Except Rent, Utility Bills, Deposits (and 2 Exceptions)

Tenants will no longer be responsible for any costs except: the rent, the tenancy deposit and a holding deposit (more on these below).

This means it is no longer possible to ask tenants to cover the cost of their own referencing. Tenants will not be able to be charged for check-in, inventory or set up fees. These fees will be deemed prohibited by law

The only two exceptions are two forms of ‘default’ fee. These fees are chargeable during the tenancy in the following circumstances, provided the relevant clauses are written into the tenancy agreement.   

a) Late Rent Fees

Fees will be charged for rent payments that are over 2 weeks late. The fees can be up to 3% over the prevailing Bank of England base interest rate. Because this is an annual interest rate, the amount will need to be calculated for the pro rata interest accrued on the outstanding rent.

For example:

The tenant is 30 days late for one £1,500 rent payment.

The base rate of interest is currently 0.75%, therefore the amount the tenant can be charged for is the outstanding rent plus a fee of 3.75% of outstanding rent, pro rata for the 30 days. (3.75% of £1,500 is £56.25.) 30 days is 30/365 of the yearly rate. Therefore, the pro rata amount is calculated by multiplying £56.25 by 30/365, which is £4.62.

Landlords will of course still be able to serve Section 8 notices for late payment of rent provided the rent is 2 months or more in arrears.

(b) Lost Keys

Tenants can be charged for losing their keys (or other security device) but the charge must be a reasonable amount for which evidence must be provided.

Both default fees will need to be included in the tenancy agreement to be able to charge them, and previous rules about fair clauses will still apply.

It has also been advised that landlords shall be able to charge up to £50 for a change of tenant, and with regards to an early surrender request by a tenant, a landlord shall be able to charge the tenant for the remaining unexpected void period.

tenant fee act 2019

Cap on Tenancy Deposits

The amount of security deposit that can be requested is being reduced to 5 weeks for AST’s (Assured Shorthold Tenancies) and licences where the rent per annum is up to £50,000, and up to 6 weeks for those tenancies over £50,000 in rent per annum.

This applies to all tenancies regardless of the reason a higher deposit was taken previously. (ie: if there was poor credit etc.)

The ability to request a higher deposit due to the applicant having a pet has also been removed, however, if landlords will consider a pet, when marketing the property, it can be advertised at 2 rental amounts (ie: £1,500 p.c.m. or £1,550 p.c.m. with 1 x pet)

tenant fee act 2019

Cap and New Rules on Holding Deposits

Holding deposits will be limited to one week’s rent.

The holding deposit can only be held for 15 calendar days unless another ‘deadline’ date is agree in writing subsequently by both parties.

After the deadline, the holding deposit must be repaid within 7 days.

The holding deposit must be returned to the tenant via a refund or by being put towards the first rental payment if agreed in writing.

There are some exceptions. In these cases the holding deposit shall be forfeited  but a reason must be given in writing to the tenant within 7 days:

  • The tenant withdraws
  • The tenant doesn’t take all reasonable steps to enter the tenancy in the required time
  • The tenant fails a right to rent check
  • The tenant provides misleading information which materially affects their suitability to rent the property
tenant fee act 2019

What Are the Penalties to Landlords Who Charge Tenant Fees?

Any person,  landlord (or agents) or any third parties who charge fees to Tenants could face paying huge fines.

The first offence would be a civil offence, with a fine of £5,000.

If the offence is repeated within five years, this would be deemed a criminal offence and levies a fine up to £30,000.

Local Trading Standards organisations will enforce the ban.

Rental Boost £7,000 to £10,000 p.c.m.

Uplift in activity for high end rentals outside of London

High end rental property

During 2018 there has been a notable uplift in activity for high end rentals outside of London, especially from our perspective on the Berkshire / Hampshire borders.

Recent properties taken to the rental market in the £7,000 to £10,000 p.c.m. sector have seen rental offers from multiple tenants, so what’s driving this demand?

With residential house sales sub £2.0m. seemingly trading well as we approach the close of 2018, the over £2.0m. sector is still on the quiet side, with a number of high end house buyers deciding to pop into a property rental for the next year or so, using the stamp duty funds they would have allocated on a property purchase around £2.0m. or more, to pay for the property rental instead of going into the Government coffers by way of stamp duty (about £154,000 at £2.0m. and £274,000 at £3.0m.).

Take the property shown above, which is a typical example of a fine home that recently went to the rental market and discovered interest and offers from multiple potential tenants.

The medium term outlook for top end rentals is positive, and for home owners selling in the £2.0m. to £5.0m. sector there could be good news post Brexit, because the level of hot buyers in rental property looking to exit and buy will be at a good level.

The news for house sellers is that you can and will sell successfully in today’s market, but don’t expect a fancy or inflated price.

Large house price gains are gone for a while, but like all markets when they rebound from a low they come back with a sharp and fast uptake. Savvy buyers know this and are taking care of business now. The hot houses sales market post Brexit could be the £2m. to £5m. sector. In the meantime home owners with such luxury property, in prime real estate areas such as Finchampstead in Berkshire, can take time out from selling and enjoy some extra dividends in the rental market.

If you would like to know more about the market for rental property in the £7,000 to £10,000 p.c.m. sector, do email Nicola Bremner nbremner@mccarthyholden.co.uk

Nicola Bremner Residential Lettings Director
Nicola Bremner M.A.R.L.A. - Director McCarthy Holden

Rental Preview of Hampshire Period Property

Due to the market soon

Full details and more photographs will be available soon about this country rental opportunity.

If you are in the market to leave London and experience country life, yet remain connected, then this character period property could be an excellent choice.

The anticipated guide price is £3,800 p.c.m.

Leave London for period house rental

Located on the Bramshill / Heckfield borders nearby to the sought after village of Hartley Wintney, this property offers substantial living space.

rear view elevation of period house rental in Hampshire
rear elevation - front view to follow soon

Accommodation features 5 bedrooms, with the master bedroom benefiting from an en-suite bathroom / shower room. There is also a stunning family bathroom on the first floor.

Master bedroom of period house rental
Master bedroom
Bath tub at period house rental
Family bathroom

On the ground floor accommodation includes a substantial kitchen / breakfast room, a fine living room, a study, a music room and gym room.

Living room of period house rental
Living Room
Kitchen in period house rental
Kitchen / Breakfast Room

Contact the Hartley Wintney branch of McCarthy Holden for further details. Telephone 01252 842100

5 Top Tips For Being A Happier Renter

renting-tips, homes-in-hampshire, homes-to-rent

Nobody dreams of renting a house forever - but if this is the situation you're in, you may as well make the most of it, says Abi Jackson.

Whether you’re a fully-fledged member of Generation Rent, or a family for whom the property ladder is still a step out of reach, renting can sometimes feel frustrating.

It’s your home – except, well, it’s not really, is it? Somebody else is the boss of it, which – while there are some pros to this – means there are plenty of less than ideal cons, too.

But, as somebody who’s been renting for two decades, I’ve learnt (often the hard way) that there are certain things you can do to help make living as a rent-paying tenant the best it can possibly be.

Here are my five top tips…

  1. Be on good terms with your landlord/letting agent

When you’re looking for a place to rent, remember you’re vetting the people you’ll be renting with/from, as much as the property itself. Mutual trust and respect, and an ability to communicate, will count towards a lot.

There might be times when things go wrong and need to be fixed, fast. A broken toilet/tap/boiler, for instance. The good thing is, where a plumbing disaster due to wear-and-tear or technical issues is concerned (or any similar scenario), your landlord will be picking up the bill. The sometimes not so good thing is, you’ll be relying on a third party to sort things out. Now, this doesn’t automatically mean you’ve got a headache on your hands, but it might be a bit of a nuisance – and you’ll be doing yourself a big favour if you get on good communication terms with your landlord/letting agent from day one, rather than waiting until something ‘goes wrong’ to make contact.

  1. Streamline, streamline, streamline

It’s often said that our European cousins are much better at the whole renting game than us, being far more likely to rent their ‘forever home’, while us UK renters might find ourselves moving a lot (I stopped counting at 13), and it sucks. The good thing though? You’ll get so sick of packing and unpacking and losing money to removal vans (and cramming all your worldly belongings into one small bedroom, if you’re sharing a house), you’ll reach a point where you just don’t care for ‘stuff’ any more. Marie Kondo ain’t got nothing on me: I saw the light after move number 11 and waved goodbye to clutter for good. Do yourself a favour and get strict about the ‘stuff’ you let into your life. The next move will be a lot easier and, without even really trying, you’ll be living a less consumerist lifestyle – and will have more money to spend on experiences (tick, tick, tick).

renting-tips, homes-in-hampshire, homes-to-rent
  1. Give yourself reasons to get out of the house

Live in a shared house? No matter how great your housemates are, there will be times when you desperately wish you could afford your own place. Plus, self-comparison is part of the human condition, and if there are moments of mild (or severe) despair, when you’re wondering how you’ve not managed to bag that mortgage yet, while everyone around you is upgrading their kitchen – you’re not alone. Until that day comes for you, though, you need to make the best of the situation you’re in now – and embracing life outside your four walls can play a big part in this. Make dates with friends, join a club, go for walks, volunteer in your local community (no seriously, try it). Your life will be richer, your mental wellbeing will benefit, and you’ll find yourself seething about coming home to an already-occupied sofa a lot less.

  1. Make your bed king

You might not own the bed frame, or the walls around it – but that does not mean you don’t own the right to a decent night’s sleep. Good sleep is the foundation of so many thing (your health, your work performance, your overall zest for life and all the people in it) – so prioritise it and do your best to make it happen. Renting doesn’t have to mean putting up with a crap, wafer-thin mattress or not-quite-right bedding. If your landlord doesn’t feel the same way, save up and invest in the best mattress you can afford (it’ll be some of the best money you’ve ever spent), and a pillow you look forward to sinking your head into every night. Treat yourself to some fabulous bed linen too; as far as ‘home purchases’ go, you can pick up some great designs at reasonable prices, and you’ll get way more pleasure from it than a TV upgrade.

renting-tips, homes-in-hampshire, homes-to-rent
  1. Find ways to get personal

One of the most frequently-cited phrases among us long-term renters: ‘I just want to be able to hang whatever pictures I want on the walls!’ There’s a general assumption that landlords don’t want tenants to make their house too much of a home (by banging nails into walls, that sort of thing). Have you actually asked your landlord about this though? There’s no harm in asking.

Even if nails are out, there are lots of other ways you can personalise a space without permanently affecting the actual walls or structure. Get creative and remember that little touches can make a big difference. Everybody needs some home comforts, even if it’s just a throw from Matalan, a few coloured utensils in the kitchen that feel more like ‘you’, or a stack of books on the coffee table that light a spark every time your eye catches them. You may not be putting down permanent roots in this property, but right now, it’s home – so don’t underestimate the importance of making it feel that way.

If you want to find our more information about renting through McCarthy Holden, then call the lettings team on 01252 622550 or follow https://www.mccarthyholden.co.uk/letting/ 

×
Find a Property
M
Country & Equestrian