Is letting agent fees going to be banned by the UK Government?

Is letting agent fees going to be banned by the UK Government?

Is letting agent fees going to be banned by the UK Government?

The UK is considered the most attractive and adventurous place to live among many other countries. Over the years, the population has grown tremendously, where people from different parts of the world move into the UK regularly for many reasons.

Most of them love settling down in the calm and green neighbourhoods, while some shift to this country for lucrative employment opportunities and educational purposes.

However, accommodation has always been a question hanging over every other person entering the UK. With property prices steering up in recent times, it is difficult for the residents to afford independent homes. 

Expats live here for a short duration and avoid investing in a home despite the availability of properties for sale in Cheltenham and other boroughs of London and the UK.

Comparing the affordability, complexities and duration to complete the entire process, renting has been an easier option. Although, tenants were facing their share of problems due to the generous amounts collected by letting agents, causing people to feel unsettled.

This situation made them think twice about renting a home in any part of the UK. Tenants were being charged inconsiderable amounts of money for a long while, which pushed the government to come up with The Tenant Fees Act in 2019.

This was done due to the unnecessary or excess amounts charged in the name of tenancy fees. After endless discussions over the years, the primary aim of introducing this law was to make the process of tenancy easier and affordable for people. 


Before this law was authorised by the government, tenants in the UK were subjected to pay for multiple reasons apart from the initial deposit and the monthly rent to the landlords or the letting agents. This made renting a big challenge for people moving into the country for the first time.

Usually, letting agents are hired to assist with hunting homes for rent, show different property types, create customised tenancy contracts and be the main point of contact with the landlord. The typical letting agent fees range from £200 to £400 per tenancy contract.

In the last few years, many agencies have evolved who offer this service, but charge exceptionally high. The fees differ with every agency, which has made the process difficult for the tenants.   

Implementation of The tenant fee act had been in talks since 2017 to make the renting process a smooth and fair one for both tenants, landlords and letting agents.

After consulting several people in each category, some restrictions were drafted, which was later passed on in the parliament and became law in 2019. After the approval of this law, the tenancy fees were more transparent, and this increased the competition in the rental market.


  • Letting agents and landlords are approved of charging for specific fees from the tenants at the time of onboarding. They are:
  • Rental charges: The monthly rent of the property should be fairly priced based on the property type and other aspects. This rent shouldn’t be changed or combined with further charges along with this till the end of the yearly contract.
  • Initial deposit: The refundable security deposit should not exceed the rent charged for five weeks. If the deposit amount exceeds this criterion, landlords should return the excess amount.
  • Cost for replacing lost key or damages caused to the property by the tenant.
  • Holding deposit: This is paid by the tenant to reserve the property in this competitive property market, which costs no more than a week’s worth of rent which is refundable later.
  • Early tenancy termination: When a tenant wants to vacate the home before the end of the contract period, they should pay the rent to compensate for the void duration.  
  • Separate payments for utilities, broadband service, and the yearly council taxes.
  • Default late payment of the monthly rent, which must be included in the tenancy agreement.


Private tenancies and letting agents in the UK are liable to follow these terms irrespective of when the contract was signed by the tenant. Some of the fees that were charged earlier that are now banned are:

  • Holding deposit and the initial deposit is higher than the quoted amount.
  • Upfront letting agent fees: This includes administration, credit check, guarantor charges and referencing. It is the responsibility of the owner to handle all these costs.
  • Check-out fee at the time of vacating
  • Conduct a thorough cleaning of the house at the end of the tenancy.

Despite the ban, if the agent or the landlord have charged any extra fee that doesn’t include in the contract, they will have to return the money within a stipulated time. They can be fined up to £5000, and if this continues, they can be permanently banned from renting their properties further in the future.