UK estate agent fees & The Tenant Fees Act (2019)
Renting can be complicated. For example, since the Tenant Fees Act of 2019, it’s illegal for tenants to be charged estate agent fees in the UK, including admin and agency fees. The Mix explains the new rules, as well as other things to bear in mind when you’re looking to rent.
How much are admin fees for renting?
Previously, one of the main questions people would look up when renting would be ‘How much are admin fees for renting? Now you don’t have to, because the average estate agent fee (for online estate agents, high street estate agents and in person ones) is approximately £0.00.
Yep, that’s right. Before 2019, average estate agent fees in the UK were getting astronomical, so the government decided to step in. So, nowadays if your landlord or agent is trying to charge you admin or agency fees when you start renting, they’re breaking the law.
This is because the Tenant Fees Act of 2019, only allows landlords or their agents to charge tenants for: the rent, the tenancy deposit, a holding deposit (generally a weeks rent), two kinds of default fees…and they can also charge you up to £50 if you need to change the tenancy agreement (such as if another person moves in, or you can convince them to allow you to have a pet, even if it wasn’t included in your original contract). Okay, so maybe only was the wrong word. But, hey, it’s still better than before.
If your landlord does try to charge UK estate agent fees or breaks the law in any other way, you might want to report them to the Property Ombudsman. They’ll review them for any malpractice.
What is a tenancy deposit?
A tenancy deposit is used to cover any damage you may cause while living somewhere. This means that you should get it back when you leave… unless you’ve spilled red wine all over the carpet and snapped the bed in two. So maybe go back to theirs for date night.
We know that deposits can be pretty complicated. To help, you can check out our article on rent deposits here. And remember, by law, the tenancy deposit can be no more than five weeks’ rent.
What is a holding deposit?
You pay a holding deposit before you sign your tenancy agreement as a guarantee that you’re definitely taking the house or flat. Essentially, it’s an adult version of no takesies-backsies.
But don’t fret, because you’ll get the holding deposit back once all the contracts are signed — or it’ll be included as part of your tenancy deposit. Either way, that money’s not going to waste. But make sure to ask the landlord or letting agent to give you written confirmation they received it, and a receipt. You know, just in case.
Can you get a holding deposit back?
Unfortunately, if you change your mind and don’t want to move in you won’t get your holding deposit back. The Mix spoke with a member of our community who agreed to rent somewhere with their partner, paid a holding deposit, then broke up with their partner and wanted to cancel. Regardless of the circumstances, legally you can’t get your deposit back. Some estate agents and landlords might be open to returning some of your money if you ask them really nicely. But they’re under no legal obligation to do so.
If you’ve signed a tenancy agreement but want to cancel, see this article. And see our article ‘what is a tenancy agreement’ for more information on tenancy agreements.
What are default fees when renting?
If the landlord or agent has written it into your contract, they’re allowed to apply an extra charge if your rent is over two weeks late or you lose your keys. So you should always look over the fine-print in the contract.
When it comes to late rent fees, the penalty can be up to 3% of your monthly rent, plus the Bank of England base interest rate.
And if you lose your house keys, the landlord or agent can charge you for a replacement. The catch is that they have to give evidence of the amount it cost them, e.g. a receipt for £5 for getting a new key cut.
Late rent fees might not seem like much. But it’s important to remember that your landlord can start the eviction process straight away if you miss a rent payment and any of the following has happened:
- You’ve been late with rent before.
- You’re already in arrears with your rent.
- The fixed term period of your tenancy has ended – if your tenancy is an assured short-hold tenancy.
Can I get help paying one month’s rent in advance?
Landlords normally ask for at least one month’s rent in advance before you move in. If you’re on benefits you can get a budgeting loan to help with this; simply fill in this form and send it to your nearest Jobcentre. Money will be taken out of your benefits each month for two years to pay it back.
Plus, some councils, charities and housing associations run schemes to help people on a low income pay their first month’s rent. Ask your local council for more information.
What does a guarantor do?
Essentially, a guarantor is legally responsible for covering your rent if you can’t/don’t pay it.
Not everyone needs to find a guarantor. But you’ll almost definitely need one if you’re a student, or you can’t prove you earn enough money to pay your rent.
Who can I get to be my guarantor?
It’s easiest to get a parent or someone you know to be your guarantor. If that’s not an option for you, then you can try a ‘guarantee rent scheme’ or a ‘bond scheme’. These are run by local charities or the council. They agree to cover any rent you can’t pay or any damage you cause – but you have to pay them back instead of your landlord.
To find your nearest scheme, use this search box on the Crisis website.
Can I pay rent in advance instead of using a guarantor?
The short answer is yes, you can totally pay rent in advance instead of using a guarantor .
Longer answer? Some estate agents will let you pay rent in advance instead of using a guarantor. This can be helpful if you don’t know any potential guarantors. The only problem with this is you might need to pay several months’ rent in advance. And that can quickly add up to a lot of cash. So if you need some tips for easy ways to save money, read this.
Watch this video for more information on renting your own place:
Need more help and advice about renting? Check out The Mix’s renting hub here.
By Nishika Melwani
Updated on 28-Apr-2022
No featured article