The tenant fee ban will save UK renters £192 million a year, new analysis has found.
Researchers scouring government data found there are some 860,000 rental transactions a year across the UK, with the average tenant is being charged £223 in fees alone.
But under new laws set out in the Tenant Fee Act 2019 landlords and letting agents will not be permitted to charge exorbitant, arbitrary fees – saving Brits a massive £191,780,000 a year.
Tom Woollard, co-founder and CEO of Bunk, which carried out the research, said: “For far too long letting agents have essentially been writing their own rules when it comes to the fees they charge tenants for all manner of things, and as a result, it has left a very sour taste in the mouths of many in the renal sector.
“The ban on tenant fees is undoubtedly a step in the right direction as we now have a clear piece of legislation that letting agents, landlords and tenants can all adhere to with a good level of accountability when this isn’t the case.
“Until this point, the majority of letting agents have essentially been taking extra money above and beyond any justified fees for no additional work and so the thought that they might try and recoup this ‘lost’ revenue through rental hikes or any other means is quite laughable.
“Only time will tell if this does happen and there will no doubt be a knee-jerk reaction of some sort by the industry.
“Hopefully it will act as a catalyst for the sector to stand up and show it can provide a good service for a reasonable fee, and that letting agents still hold some value in a world where technology and innovation will undoubtedly render them obsolete.”
Bunk has launched a new online platform to recoup losses for landlords and streamline the process for tenants.
Founded by three university graduates and based in Bristol the app aims to help landlords minimise costs, which they can no longer recoup through fees, whilst making the whole process simple and affordable for renters.
A recent study by ARLA showed that 70 per cent of letting agents surveyed were looking to increase their costs towards landlords as a result of the Tenant Fee ban.
Some 87 per cent of letting agents believe rent prices will increase as a direct result of the ban, putting pressure on some of the country’s more vulnerable tenants.
But that is something hybrid letting agency Bunk is looking to avoid by offering more efficient, technology-driven solutions for landlords and tenants.
Woollard, 24, added: “Unlike most agents, we don’t need to increase landlord fees.
“As other agents go down that route, we are passing real savings onto our customers across the UK.”