New legislation has been unveiled that will see letting agent fees being banned and hefty fines being imposed on those who try to charge them.
In addition, agents in England and Wales also face imprisonment if they have already been fined £5,000 for imposing fees.
The news has been welcomed by tenant groups who say tenants have been at the mercy of agents who have charged up to £300 for the printing of a new tenancy agreement and £200 for simply changing a tenant's surname on forms.
One survey from housing charity Shelter reveals that one in seven tenants are paying more than £500 for their agent's fees while the English Housing Survey reveals that the average fees being paid are £223.
Now the draft Tenant Fees Bill will place a limit on holding deposits of one week's rent and a security deposit of a maximum of six weeks' rent.
The legislation also lays out the requirements of agents and landlords for returning the tenant’s holding deposit.
First breach of the agent fees' ban
The law also introduces a new civil offence which will see agents being fined £5,000 for their first breach and if they commit another offence within five years, they face imprisonment.
Civil penalties are also being proposed up to £30,000 rather than landlords and agents being prosecuted.
The ban will be enforced by local trading standards departments and there is also provision for those tenants who want to recover fees that have been unlawfully charged.
The founder of eMoov, Russell Quirke, said that landlords will probably increase rents to cover the extra costs.
He explained: “Agents will try to recoup losses such as charging a higher fee to landlords which is an 'around the houses' way of bypassing letting agent fees so additional costs are likely to lead to higher rents.”
The government says the introduction of its new bill will help improve transparency for the UK's private rental sector and boost competition and affordability.
Bid to make inventories mandatory
Meanwhile, the Association of Independent Inventory Clerks has launched a petition urging the government to make inventories a compulsory requirement for a rental property.
With nearly 1,000 members around the country, the AIIC says that inventories should be an industry standard for properties on assured short hold tenancies.
Danny Zane, the AIIC's joint chair, said: “It's clear the government is keen to increase professionalism and regulation in the letting sector and we see no reason why, as part of this movement, mandatory inventory reporting should not be required.”