Following growith in the UK rental market, letting agents are to be banned from charging fees to tenants “as soon as possible”. This is under new plans announced in the government’s Autumn Statement, and has the aim to improving competition in the private rental market.

Tenants can be charged fees for a range of administration functions when signing up to a tenancy agreement, including reference, credit and immigration checks. Since 2016, lettings and managing agents in England and Wales have been legally obliged to clearly publicise these fees.

The latest move from the government could spur competition in the market, as landlords (unlike tenants) can shop around for the agent with the cheapest fees. Chancellor Philip Hammond has said “shifting the cost to landlords will save 4.3 million households, hundreds of pounds”.

The current situation

At the moment, tenants face charges when agents draw up their tenancy agreement. They also face the potential of a non-refundable holding deposit. Fees vary widely from agent to agent, with costs in some bigger cities working out to be much higher than elsewhere.

Currently, traditional letting agencies typically charge tenants a total of £125 in fees to rent a home. However, many tenants in London can see fees of over £400. This has led to criticism that costs are being ramped up elsewhere rather than being passed on. Credit checks, for example, can cost as little as £3 to carry out, but many letting agents charge tenants in excess of £50.

In other instances, tenants can be charged for administration work such as tenancy renewals and inventories, yet the letting and management fees that are already being charged to landlords should cover these costs.

The Department for Communities and Local Government will consult in advance of bringing in any future legislation on this matter.

To gain our advice on the issues in this article or any other rural planning and development matters, call Richard Edge or Alex Orttewell on 01935 852170 or email