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Letting agents in England have lost almost £900m since agency fees charged to tenants were scrapped six years ago, fresh research shows.
Prior to the introduction of letting-agent fees in 2019, almost half – 45% – of tenants were charged fees when renting a new property, at an average of £269 per household.
Generation Rent estimated that if the fees had continued at this rate, new tenants would have been collectively charged £889m.
Since the introduction of the Act, non-refundable fees at the start of a tenancy have been abolished, along with renewal and end of tenancies, and capping deposits at five weeks’ rent for most tenancies.
Generation Rent also looked into tribunal cases under the Act, and found there had been 68 cases since it came into force six years ago, with 72% providing a positive outcome for the tenant, meaning at least some of the contested sum was returned. In 62 per cent of cases, tenants received the full amount back.
Some 65% of cases were linked to the failure of landlords or letting agents to return holding deposits, typically when the tenancy did not go ahead.
Ben Twomey, chief executive, Generation Rent, said: “Before they were banned, fees gave letting agents a licence to print money, with some agents charging as much as £800 to start a tenancy.
“Renters had little option but to pay the fees, which also made it difficult to compare the true cost of renting a home.
“Since it came into force, the Tenant Fees Act has saved renters nearly a billion pounds, and simplified the process of finding a home. But there is still much more to do to make renting more affordable and reduce unwanted moves.
“We want to see more positives like the Tenant Fees Act, and are committed to fighting to rebalance the system, and get more money back into renters’ pockets — where it belongs.”
New law must take ‘inconsistency with how letting fees are charged’ into account – Propertymark
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