The Department for Communities and Local Government (DCLG) will introduce a draft bill to ban letting agent fees today.
The Tenant Fees Bill aims to cap holding deposits at a maximum of one week’s rent and security deposits at six week’s rent.
It will also impose a £5,000 fine on individuals who breach the ban, and allow tenants to recover unlawfully charged fees.
The aim is to improve affordability and transparency in the private rental market and prevent estate agents from charging a fees to both tenants and landlords.
Communities secretary, Sajid Javid, said: ‘This government is determined to make sure the housing market works for everyone. Tenants should no longer be hit by surprise fees they may struggle to afford and should only be required to pay their rent alongside a refundable deposit.’
Responding to the announcement, Cllr Martin Tett, the Local Government Association’s (LGA) Housing Spokesman, said: 'This ban on letting agent fees and a cap on holding deposits will bring much-needed clarity for the private rented sector.
'Excessive fees are a concern for tenants and councils, as they hamper access to the market and put pressures on other tenures, such as social or supported housing.
'If the Government expect local authorities to enforce the ban, it’s vital that they provide the resources and funding that will be needed in order to make such enforcement successful. That means making sure up-front funding is provided to support Trading Standards, and that a national information campaign is undertaken to make tenants aware of the new rules.
'The LGA has previously asked for councils to have greater flexibility to deliver area-specific private rented sector licensing schemes. This bill would be the perfect opportunity to provide this, but, as a minimum, the Government should make sentencing guidelines for Housing Act offences a priority, so that appropriate fines can be awarded in court.
'A thriving private rented sector contributes to a balanced mix of affordable housing in communities, and we know that with the right measures, that can be delivered – but only if councils are adequately resourced to ensure their residents are fully protected.'