process

Tenant Fees Bill passes final hurdle on way to becoming law

Major changes in the private rented sector are on the way after the Tenant Fees Bill passed its third and final reading in the House of Commons.

MPs voted in favour of the bill by 293 votes to 220, with the formality of Royal Assent set to rubber-stamp the new measures before they become law on 1 June 2019.

Deposits capped at five weeks’ rent

All upfront letting and agency fees charged to tenants will be banned across England, and tenancy deposit caps will be set at five weeks rather than six. This measure proved controversial in the bill’s passage through Parliament, with Residential Landlords Association David Smith saying landlords would feel “let down” if it happened, that it would force rents up and even make landlords walk away from the industry.

Three-week cap rejected

A last-minute amendment aimed at reducing the deposit limit to three weeks, from Labour’s shadow housing minister Melanie Onn, was rejected. Some minor technical amendments were passed, including one which bans agents from compelling tenants to enter into a contract with them for services, such as inventories.

“The government has already brought forwards the best solution for the tenancy deposit scheme cap which is in the interest of both landlords and tenants,” said Housing Minister Heather Wheeler.

David Cox, Chief Executive, ARLA Propertymark, said: “The tenant fees ban is now an inevitability, and agents need to start preparing for a post-tenant fees world.”

The bill was welcomed by Kevin Hollinrake MP, Chairman of Hunter’s estate agents.

“I am in principle and in practice very supportive of the Bill—I have been right from the start—despite my business interests and despite the extreme consternation within the industry at my support,” said Hollinrake during the debate.

“It is absolutely right that there be a firewall around a tenant’s ability to shop around when they have found a house or flat they want to rent. We are right to believe in free and competitive markets. This was not a free and competitive market, and it is right that we act in this area.”

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