It is common for letting agents to charge a fee to the tenant when moving into a property. This covers work such as credit and reference checks. Typical fees range from £25 to £150 per person.
However, this is set to change. The government introduced a draft Tenant Fees Bill in November 2017 with the aim of making residential letting more affordable for tenants. This will introduce a ban on letting fees paid by tenants on housing in England.
Once introduced the only payments permitted to be charged to tenants will be:
- A refundable tenancy deposit of no more than six weeks' rent
- A refundable holding deposit of no more than one week's rent
- Payment due by the tenant in the event of a breach of the agreement or defaulting on rent
In securing a tenancy a tenant must hand over to the letting agent or landlord a deposit, typically the value of four to six week's rent. The reason for having a deposit is to cover any damage to the property during the tenancy. A deposit can be a key area of contention, with some landlords in the past withholding a deposit for no reason or paying it back some months after a tenancy has ended. Arguments over damage can arise. The best way of avoiding problems is to carefully go through the inventory of a property with the landlord or agent, pointing out any damage or problems before you move in. A deposit is not designed to be set against the last rental payment. Disputes surrounding deposits in recent years have been minimised through the creation of tenancy deposit schemes.