Lettings agent fees will be banned as part of the Tenants’ Fees Bill announced in the Queen’s Speech, which will make the prospect of renting a new property much less of a financial strain.

Lettings agent fees can be charged for numerous reasons, including administration, reference, credit and immigration checks. The latest English Housing Survey found that fees typically cost £223 with one in seven tenants paying more than £500.

When renting you should remember that until the ban is live, the 2015 Consumer Rights Act requires all agents to publish all their fees on their website so that you will know upfront exactly how much you’ll be charged – if they don’t they can be fined up to £5,000.

From finding the perfect place to scheduling viewings, sending paperwork back and forth and of course the move itself, renting can be a stressful experience – especially for the first time. Not having to pay lettings agents fees will reduce your total financial burden for when you move, as you’ll also need to pay a sizeable deposit and the first month’s rent before you even move into the property.

The deposit can be a big expense. For a deposit, a lettings agent will typically charge a month’s rent plus £100. So if your rent is £600 per month, you’ll need to pay £700 deposit. You should always make sure that when you pay your deposit, it is protected under a tenancy deposit scheme within 30 days and you’re provided with details on the scheme and how they’ve protected it. This protects you as the renter when you move out and request your deposit back.

Lettings agents fees were previously banned in 2012 in Scotland, which affected over 4.8 million households. There were some initial concerns that lettings agencies would increase their fees to landlords who would in turn pass on these costs directly to the tenants by raising rents. However, a recent survey by The Tenants’ Voice found that only one landlord in 12 said they noticed an increase in agency fees which they then passed on to their tenant since the ban went live.

A draft version of the bill is likely to be published later in 2017 but it could be early 2018 onwards until it goes into effect. Until the ban is live, you should always do your research on how much your lettings agency will charge in fees so that you can budget in advance.

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