Tenant Fees

The Tenant Fees Act 2019 came into force on 1 June 2019 and banned most tenant fees in England.

The Act applies to:

assured shorthold tenancies
licences (such as lodger lettings)
student lettings provided by a specified educational institution

However, it does not apply to contractual tenancies or assured tenancies.

Only a "permitted payment" may be requested from a "relevant person" (for example, a tenant, prospective tenant, or guarantor).

The rules apply to any new tenancy or renewal granted on or after 1 June 2019. For existing tenancies granted before that date, the rules apply from 1 June 2020.

Under the rules, a landlord or letting agent must not require a relevant person (tenant, guarantor, or anyone acting on their behalf) to:

make a prohibited payment to the landlord or an agent in connection with a tenancy of housing in England
make a prohibited payment to a third party in connection with a tenancy of housing in England
enter into a contract with a third party in connection with a tenancy if that contract is for the provision of a service or insurance (except utilities or communication services, see below)
make a loan to any person in connection with a tenancy of housing in England

The only payments allowed are known as "permitted payments". These are listed in Schedule 1 of the Act and include:

Rent
Tenancy deposit
Holding deposit
Payment in the event of a default
Payment of damages for breach of an agreement
Payment on variation, assignment, or novation of a tenancy
Payment on termination of a tenancy
Payment in respect of council tax
Payment in respect of utilities, etc.
Payment in respect of a television licence
Payment in respect of communication services

Rent

The request for rent is a permitted payment. However, the amount charged for an earlier period must not be greater than that for a later period, and any excess would be prohibited under the Act.

For example, if a tenancy starts on 1 July and the rent for July is £900.00 (P1), then from 1 August it is £700 per month (P2). As the amount for P1 is greater than P2, the difference is prohibited (in this example, the difference is £200, and it is that amount which is the prohibited payment — the £700 remains a permitted payment).

Note: This payment should ideally be requested once the tenancy agreement has been signed. For more details, please see the receiving order section below.

Tenancy Deposit

A tenancy deposit is a permitted payment, but it's limited to a maximum of five weeks' rent where the annual rent is less than £50k and six weeks' rent for a yearly rent of £50k or over.

To calculate the 5 or 6 weeks' rent amount, you first take the annual rent and divide by 52 to get one week's rent and then multiply by 5 or 6 as appropriate.

Note: This payment should ideally be requested after the tenancy agreement has been signed. For more details, please see the receiving order section below.

Holding Deposit

A holding deposit is a permitted payment taken before granting the tenancy. It is ordinarily used whilst the landlord or agent takes steps to grant a tenancy to the payer (such as referencing, etc.).

A holding deposit is defined under the Act as meaning (highlights added) "... money which is paid by or on behalf of a tenant to a landlord or letting agent before the grant of a tenancy with the intention that it should be dealt with by the landlord or letting agent in accordance with Schedule 2 (treatment of holding deposit)."

There is a strict procedure to follow under Schedule 2 of the Act.

The maximum holding deposit that may be requested is one week's rent (annual rent divided by 52).

Only one holding deposit may be held at any one time for the same property.

There is a deadline for agreement date, which is 15 days from the date the holding deposit was received. This deadline for agreement date may be changed by agreement with the tenant in writing.

The holding deposit must be repaid by the person who received it if:

the landlord and tenant enter into a tenancy agreement, and in this case, the person who received it must repay it within seven days from the date of the tenancy agreement
the landlord decides before the deadline for agreement not to enter into a tenancy agreement, and in this case, the person who received it must repay it within seven days of the decision, or
the landlord and tenant fail to enter into a tenancy agreement before the deadline for agreement, and the person who received it must repay it within seven days from the deadline for the agreement date.

Where the landlord and tenant have entered into an agreement, instead of repaying the holding deposit, the landlord may use it against the first rent or tenancy deposit, but only if the payer has agreed to this. Otherwise, it would need repaying within seven days of entering the tenancy agreement.

There are a small number of exceptions where the landlord or agent may retain the holding deposit, which are:

the landlord is prohibited by section 22 of the Immigration Act 2014 (persons disqualified by immigration status) from granting a tenancy of the housing to the tenant, and the landlord (or letting agent acting for the landlord) did not know and could not reasonably have been expected to know, the prohibition applied before the landlord or agent accepted the deposit, or
suppose the tenant provides false or misleading information. In that case, the landlord is reasonably entitled to consider the difference between the information provided and the correct information in deciding whether to grant a tenancy. Or the landlord is reasonably entitled to take the tenant's action in giving false or misleading information into account in determining whether to grant such a tenancy.
if the tenant notifies the landlord or letting agent before the deadline for agreement that the tenant has decided not to enter into a tenancy agreement

In every case, as listed above, where the landlord or agent intends to retain the holding deposit, they must send a written notice to the person who paid the holding deposit within seven days. A failure to do so negates the ability to retain, and the person who received the holding deposit must repay it regardless of circumstances (including if the tenant notifies them that they no longer wish to proceed).

When Can the Holding Deposit, Rent and Tenancy Deposit Be Requested/Received?

The holding deposit of one week's rent is expressly allowed before the tenancy has been granted - its purpose being to hold the dwelling for the applicant whilst references and other checks are carried out.

The holding deposit is the only amount permitted under the Tenant Fees Act to be retained by the landlord before a tenancy has been granted.

In relation to a shorthold tenancy (assured from 1 May 2026), the tenancy deposit means (s.212(8) Housing Act 2004):

any money intended to be held (by the landlord or otherwise) as security for--
(a) the performance of any obligations of the tenant, or
(b) the discharge of any liability of his,
arising under or in connection with the tenancy.

Although there is no restriction on taking the tenancy deposit (up to 5 or 6 week's rent) before the tenancy has been entered into (signed and legally binding), if the tenant were to withdraw before the tenancy has been signed, the whole tenancy deposit must be returned in full because they haven't breached an obligation under or in connection with the tenancy. There is no provision to withhold part of a tenancy deposit until a tenancy commences, unlike the holding deposit.

Furthermore, the deposit must be protected within 30 days of receipt. If there is a delay in signing and the tenancy has not been signed by all parties within 30 days of receipt, how can the deposit be protected if there's no tenancy? Also, what if the tenants withdraw after protection but before signing? These issues can be avoided by taking only a holding deposit before signing.

Similarly, any rent received before a tenancy has been entered into would have to be refunded as it's only permitted where it's made under a tenancy.

Therefore, the ideal order of receiving monies is as follows:

Before signing: holding deposit of up to one week's rent.
After the tenancy has been entered into (signed and legally binding): the tenancy deposit (less the holding deposit) and first payment of rent can be received - even if the tenancy commencement date is in the future.

Note: the Renters' Rights Act 2025 will expressly prohibit rent from being received until after the tenancy has been entered into and will limit the amount of initial rent that can be sought in advance from 1 May 2026.

Payment in the Event of a Default

A landlord (or an agent acting on behalf of a landlord) may seek payment for a "relevant default", which means:

the loss of a key, or other security device giving access to, the housing to which the tenancy relates, or
a failure to pay rent in full before 14 days, beginning with the date ("the due date")

when the payment is required to be made by the tenancy agreement.

The Loss of a Key

For payment in respect of the loss of a key or other security device to be a permitted payment, the cost must be reasonably incurred by the landlord or letting agent and supported by written evidence provided to the person on whom the requirement to make the payment is imposed.

Any excess over and above what costs have been reasonably incurred is a prohibited payment.

If requesting payment under this heading, the actual receipt for the new key, security fob or whatever was reasonably incurred must be provided.

The tenancy must contain a term allowing a payment request.

Failure to Pay Rent in Full

In addition to the rent itself, payment of interest is a permitted payment where there is a failure to pay rent in full before the end of the period of 14 days beginning with the date ("the due date"). The interest rate is calculated by:

the aggregate of the amounts found by applying, in relation to each day after the due date for which the rent remains unpaid, an annual percentage rate of 3% above the Bank of England base rate to the amount of rent that remains unpaid at the end of that day.

Therefore, a daily rate may be calculated and added from day 15 of non-payment onwards (but the interest can then be applied back to the day after the 'due date').

The tenancy must contain a term allowing a payment request.

Payment of Damages for Breach of an Agreement

Payment of damages for breach of a tenancy agreement or an agreement between a letting agent and a relevant person is a permitted payment.

The Consumer Rights Act 2015 requires that any tenancy term be "fair", so the Tenancy Fees Act 2019 doesn't go any further than this for this permitted payment.

Payment for breach of tenancy allows for damages, such as repairs, to be claimed when the tenancy ends.

Payment on Variation, Assignment or Novation of a Tenancy

Only if the tenant requests a landlord or letting agent vary, assign or novate is a payment in consideration for performing the request a permitted payment. But, if the amount exceeds the greater of £50 or the reasonable costs of the person to whom the payment is to be made, the amount of the excess is prohibited.

Payment on Termination of a Tenancy

Payment is a permitted payment if it is a payment to a landlord or letting agent in consideration of the termination of a tenancy at the tenant's request.

That can be a request before the end of the term or, for periodic, without the tenant giving the required notice under the tenancy agreement or law.

However, to be a permitted payment, the amount cannot exceed the loss suffered by the landlord or the reasonable costs to the letting agent due to the termination of the tenancy, and any excess is a prohibited payment.

Payment in Respect of Council Tax

A payment to a billing authority regarding council tax is a permitted payment.

Note: only payment of council tax to a billing authority is permitted. A council tax payment cannot be made to anybody else (including the landlord or agent).

Payment in Respect of Utilities, Etc

Payment for the provision of a utility is permitted if the tenancy agreement requires the payment to be made, and "utility" means--

electricity
gas
other fuel
water or sewerage.

It's also a permitted payment towards energy efficiency improvements under a Green Deal plan.

There appears to be no reason why a landlord or agent cannot receive payment directly for a utility. Unlike the council tax prohibition before, this part does not require payment to the utility supplier.

The resale of gas and electricity is already governed by legislation (it can only be resold for the same price it costs).

Payment in Respect of a Television Licence

Payment to the British Broadcasting Corporation regarding a television licence is a permitted payment if the tenancy agreement requires the payment to be made.

Like the council tax before, the payment is only permitted if made to the BBC.

Payment in Respect of Communication Services

Payment for the provision of a communication service is permitted if the tenancy agreement requires the payment to be made, and "communication service" means a service enabling any of the following to be used:

a telephone other than a mobile telephone;
the internet;
cable or satellite television.

However, suppose the payment is made to a landlord, and the amount exceeds the reasonable costs incurred by the landlord to provide the service. In that case, the amount of the excess is a prohibited payment.

Prohibition on Requiring a Tenant to Enter Into a Third-Party Contract

In addition to it being unlawful to request a prohibited payment, it's also not allowed to require a relevant person to enter into a contract with a third-party for:

a contract for the provision of a service, or
a contract of insurance.

Prohibition on Requiring a Loan

It's also prohibited to require a relevant person to make a loan in connection with a tenancy.

Enforcement and Penalties

Enforcement is by every local weights and measures authority in England, and provisions are in place for cross-border offences. A district council, which is not a local weights and measures authority, may also enforce.

The penalty for a first offence is up to £5,000. If a person commits a second offence within five years, a fine of up to £30,000 is payable. In addition, a second offence is a criminal offence. Furthermore, a second offence is a banning order offence.

Any financial penalty is on top of being required to repay any prohibited payments or holding deposits received.

Any financial penalty imposed is enforceable as if it were an order of the county court (allowing the request of bailiffs, attachment of earnings or a charge on property, etc.).

Restriction on Terminating Tenancy

Suppose a landlord requires a relevant person who has an assured shorthold tenancy to make a prohibited payment. A prohibited payment is made due to the requirement, or a landlord breaches the holding deposit rules. No section 21 notice may be given concerning the tenancy as long as all or part of the prohibited payment, or holding deposit, has not been repaid to the relevant person.

If the person consents, it's possible to repay by offsetting any rent or tenancy deposit due under the tenancy.

Further Guidance

MHCLG has published guidance for tenants, landlords, letting agents and local authority enforcement officers explaining how the Tenant Fees Act affects them: https://www.gov.uk/government/publications/tenant-fees-act-2019-guidance.

Renters’ Rights Act 2025: rent restrictions from 1 May 2026

From 1 May 2026, extra limits apply to what counts as “permitted rent” under the Tenant Fees Act 2019 for assured tenancies:

You cannot take any rent before the tenancy is signed.
After signing, you cannot keep asking for months of “rent in advance”. You can only take a limited amount of initial rent.

No rent before the tenancy is entered into (signed)

For assured tenancies, any rent payable before the tenancy is entered into is a prohibited payment.

This is meant to catch the usual pre-tenancy rent requests. A landlord or agent must not:

invite or encourage someone to pay rent before the tenancy is entered into
accept an offer to make such a payment
accept the payment itself (including via a third party)

A tenancy is “entered into” when the agreement is signed (so it becomes legally binding). The tenancy does not need to have started yet.

After signing but before move-in: only a limited “initial rent” is allowed

The period between signing and the contractual start date is the permitted pre-tenancy period.

During this period, you may only request initial rent. That means rent payable for:

the first rent period, and
any later rent period ending within the first 28 days of the tenancy (the “initial 28-day period”)

Anything beyond that is treated as prohibited pre-tenancy rent:

You can take the first rent payment after signing (even if move-in is weeks later).
You cannot demand extra months up front (for example, “3 months in advance”, “6 months upfront”, or “quarterly rent at the outset”) once these rules apply.
If a rent schedule tries to front-load payments by relabelling them, it will not work.

Core rule: no ongoing rent in advance

Any term in an assured tenancy that makes rent due before the period it relates to has no effect.

So, even after the tenancy has started, you cannot make rent payable before the period to which it relates (other than the limited “initial rent” described above).

What this means for start dates and rent days

Because “initial rent” is capped, start dates can matter.

Example: if a tenancy starts late in the month, but the rent day is the 1st, the lawful initial rent might only cover a short part-month period. The next full payment is not due until the rent day for the period it covers.

Other payments before move-in (unchanged basics)

These restrictions are about rent. Other permitted payments under the Tenant Fees Act still apply, including:

Holding deposit (up to one week’s rent): can be taken at any time (including before signing) and, if both parties agree, can be credited towards initial rent.
Tenancy deposit (within the 5/6 week cap): can still be taken at or before signing. In practice, many prefer to request it after signing, because it must be protected and the prescribed information served within 30 days, but the tenant might not sign the tenancy agreement.

Suggested order of events

A sensible sequence is:

take a holding deposit (up to one week’s rent)
complete referencing
sign the tenancy
then request the tenancy deposit (less any holding deposit being credited) and the initial rent, to be paid on or before move-in / key handover

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