No upfront fees for tenants
The new Tenants Fees Act 2019 aims to reduce costs for tenants and create a ‘fairer and more affordable’ private rented sector by banning all upfront fees for tenants. The Act comes into force on 1st June 2019, but you don’t need to wait until then to save money on renting a property as we don’t charge any upfront tenants fees and during the tenancy any fees are in line with the new legislation.
In line with the new legislation, you only need to make upfront payments for:
- a refundable holding deposit to reserve the property, capped at one week’s rent.
- The first months’ rent
- a refundable tenancy deposit, capped at five weeks’ rent
The fees you might have to pay during the tenancy will be:
- the cost of replacing a key(s) if you lose them or require replacements
- if you are more than 14 days late with your rent
- if you want to change your tenancy or bring it to an end early.
We are all still waiting on the government’s full advice and guidance on this legislation to be published and so some of this information is subject to change.
How much do you need to pay upfront?
Here is an example of what you might need to pay at the start of your tenancy.
If the rent is £1000 pcm
To secure the property while the pre-tenancy administration and checks are carried out:
Holding deposit of one week’s rent £230.76
To be received in cleared funds before the start of your tenancy:
First month’s rent: £1,000.00
Tenancy deposit of five weeks’ rent £1,153.84
Less the holding deposit: – £230.76
Total to pay £1,916.08
Let’s talk about deposits
A holding deposit is different from a tenancy deposit (sometimes referred to as a security deposit). A holding deposit is paid to reserve a rental property while your references are checked. By paying a holding deposit, you commit to taking up the tenancy so that it isn’t let to someone else. The property will be held for you until you sign the contract. Your holding deposit can be used as payment towards rent in advance or your tenancy deposit.
Your holding deposit won’t be refunded if you fail the referencing process, fail to meet the right to rent immigration checks, provide false or misleading information or withdraw your application.
A tenancy deposit is paid to give your landlord protection in case you leave without paying the rent or cause damage to the property or its contents. If you’ve paid all the rent due and caused no damage, the full amount of your deposit will be returned to you the end of your tenancy.
A tenancy deposit is protected under law. With Hestia Lettings and Management, your deposit will be held and protected by the Tenancy Deposit Scheme.
Please note that some landlords may require a higher tenancy deposit until 1st June 2019 when the five-week cap comes into force.
No deposit on some properties
At Hestia Lettings and Management, we have partnered with Reposit, a deposit replacement scheme, to provide an alternative to the traditional tenancy deposit.
Instead of having to find the five-week tenancy deposit before moving in, you simply pay a small fee equal to one week’s rent. Based on a £1,000.00 pcm rental, this would be £230 instead of £1,385.This means you don’t need to raise a deposit for your new property before you get your previous deposit back. While the cost is a lot less with Reposit, the charge is non-refundable so you won’t get any of it back when you leave.
Not all landlords accept this scheme yet, so please contact us to find out which of our properties are available with this option.
For more information on how the Reposit scheme works and if it may be suitable for you, please click here.
Here to help you
Contact Hestia Lettings and Management today to find your dream home rental.