Policy background
The private rented sector is an important part of the national housing market. It houses 4.7 million households in England and now represents 20% of all households.1
	Letting agents are engaged by many private landlords to let and manage rental accommodation on their behalf. Good agents provide a valuable service in ensuring that properties are safe, compliant and professionally managed; they help landlords comply with their legal responsibilities and help tenants secure safe and good quality homes.
	The duties of letting agents might include finding tenants, collecting rent, and responding to queries from tenants (for example, in relation to repairs). Landlords pay fees to letting agents for carrying out these duties on their behalf. Letting agents also charge fees to tenants for a variety of reasons, including seeking references, inventory services and contract negotiations.
	Letting agent fees are not always clearly or consistently explained with the result that many tenants are unaware of the true costs of renting a property. The competitive pressure on tenant fees is weak as agents are chosen by landlords. Letting agents may therefore impose unfair or excessive fees because tenants have a very limited ability to negotiate or opt-out.
	Renters pay an average of £200-£300 in letting fees per tenancy although many pay significantly more than this. The English Housing Survey 2014-15 found that the mean average fee paid by a household in 2014-15 was £223, while the median was £200.2
	There is also evidence that letting agent fees paid by tenants have increased significantly in recent years and that many tenants have experienced problems paying letting agents’ fees. The English Housing Survey 2014-15 reports that median fees charged by agents increased by 60% between 2009-10 and 2014-15 (14% increase in mean) and that a third (34%) of private renters said that fees would stop them moving into a new home.
	It is not simple for tenants to understand and compare agent fees since there is significant variation in the way that agents charge for their services. Further, agents charging fees to both landlords and tenants increases the risk of unfair practices in the form of double charging.
	The Government announced at the 2016 Autumn Statement that it would introduce a ban on letting agent fees paid by tenants in England to improve competition in the private rental market and give renters greater clarity and control over what they will pay. The commitment to make renting fairer for tenants was reaffirmed in the 2017 Conservative Party Manifesto.