If you’re looking to rent a property in the UK, one thing you might wonder about is estate agent fees. While these charges used to be a significant part of moving costs for tenants, changes in UK law have brought some welcome relief to renters. However, it’s still important to know what costs you might encounter during the rental process. Here’s a breakdown of what fees tenants can expect to pay (and not pay) to estate agents in the UK today.
The Tenant Fees Act 2019: What It Means for Tenants
The Tenant Fees Act 2019 brought significant changes to the rental market in England, Scotland, and Wales. This legislation aims to make renting more affordable and transparent by banning many of the fees that estate agents and landlords used to charge tenants. Here’s what the act means for tenants:
- Banned Fees: The act prohibits estate agents and landlords from charging tenants for services like viewings, tenancy agreements, referencing checks, and inventory fees. Essentially, anything related to the process of securing a tenancy is now the responsibility of the landlord, not the tenant.
- Permitted Payments: While the act bans most fees, there are still a few payments that tenants can be asked to make. These include rent, security deposits, holding deposits, and certain default fees (like charges for losing a key or paying rent late).
What Are the Permitted Fees for Tenants?
Although many of the old fees are no longer allowed, there are some costs that tenants might still encounter when renting through an estate agent. Here’s a list of the permitted fees under the Tenant Fees Act 2019:
- Rent
This is the most straightforward charge you’ll pay as a tenant. Rent is usually due monthly and should be clearly outlined in your tenancy agreement. It’s important to know exactly when your rent is due each month to avoid any late payment charges. - Security Deposit
As a tenant, you may be required to pay a security deposit, which is held as protection against damage to the property or unpaid rent at the end of the tenancy.- Deposit Cap: The Tenant Fees Act places a cap on how much landlords can charge for a security deposit:
- Maximum of 5 weeks’ rent if the annual rent is less than £50,000.
- Maximum of 6 weeks’ rent if the annual rent is £50,000 or more.
- Deposit Cap: The Tenant Fees Act places a cap on how much landlords can charge for a security deposit:
Pro Tip: Your security deposit must be placed in a government-approved deposit protection scheme (such as the Deposit Protection Service, MyDeposits, or Tenancy Deposit Scheme). Make sure you receive confirmation that your deposit is protected within 30 days of paying it.
- Holding Deposit
A holding deposit is a payment made to reserve a rental property before signing a tenancy agreement. This deposit shows that you’re serious about renting the property, and it allows the landlord or estate agent to stop marketing the property while your application is being processed.- Maximum Holding Deposit: The amount cannot exceed 1 week’s rent.
- When It’s Refundable: The holding deposit must be refunded if the landlord decides not to rent to you or if you agree to the tenancy and move in. However, if you withdraw from the tenancy or fail a right-to-rent check, the landlord may keep the deposit.
Pro Tip: Make sure to clarify the terms of the holding deposit before paying it, so you know under what circumstances it might be withheld.
- Default Fees
While most fees are banned, landlords or estate agents can still charge for certain defaults by the tenant, but these fees are strictly regulated:- Late Rent Payments: Landlords can charge interest on late rent payments, but only if the rent is over 14 days late. The interest is capped at 3% above the Bank of England’s base rate.
- Lost Keys or Security Devices: If you lose a key or security device (like a fob or garage remote), you can be charged for the cost of replacing it. However, this must be a reasonable charge, based on the actual cost of the replacement.
Pro Tip: Ask for receipts or evidence of costs if you’re charged for replacing a key or security device to ensure that the fee is fair.
- Early Termination Fees
If you need to end your tenancy early, you may be required to pay fees associated with re-letting the property or covering the landlord’s losses. However, these charges must be reasonable and cannot exceed the landlord’s actual costs.- Example: If you’re in a fixed-term tenancy and you want to leave early, the landlord might charge you a fee to cover their costs of finding a new tenant and any loss of rent until a new tenant moves in.
Pro Tip: Always check the break clause in your tenancy agreement to see if you can end the tenancy without additional fees after a certain period.
What Fees Are Banned?
To help you avoid any unfair charges, here’s a list of fees that are now banned under the Tenant Fees Act 2019:
- Tenancy Set-Up Fees: This includes fees for creating a tenancy agreement or administration fees.
- Referencing Fees: Costs for conducting credit checks or reference checks cannot be passed on to tenants.
- Check-In/Check-Out Fees: Fees for inventory checks or check-in and check-out processes are no longer allowed.
- Fees for Property Viewings: Tenants should not be charged for viewing a property or for being shown around by the estate agent.
Tips for Renting Through an Estate Agent
Even though many fees are banned, navigating the rental process can still be tricky. Here are a few tips to make sure you’re treated fairly:
- Ask for a Breakdown of Costs
Before signing a tenancy agreement, ask the estate agent for a full breakdown of any costs you’ll need to pay. This should include details of rent, security deposits, and any other fees that may apply. It helps ensure there are no surprises later on. - Read Your Tenancy Agreement Carefully
Your tenancy agreement should clearly outline the rent amount, deposit details, and any other permitted charges. Take the time to read through it before signing, and don’t hesitate to ask questions if you’re unsure about any terms. - Report Unlawful Fees
If an estate agent or landlord tries to charge you fees that are banned under the Tenant Fees Act, you have the right to report them to Trading Standards or your local council. This can help protect you and other tenants from unfair practices. - Know Your Rights
Being aware of the Tenant Fees Act and understanding what landlords can and cannot charge for can help you negotiate better and ensure you’re only paying what is fair and legal.
Final Thoughts: Navigating Estate Agent Fees as a Tenant
Thanks to the Tenant Fees Act 2019, renting a home in the UK has become a lot more affordable for tenants, with many of the old charges now firmly in the past. While you still need to budget for rent, deposits, and a few specific fees, you shouldn’t face unexpected charges when renting through an estate agent.
By understanding the rules, reading your tenancy agreement carefully, and being prepared to stand up for your rights, you can enjoy a smoother rental process—and focus on finding the perfect home without unnecessary costs.