Letting agencies have lost almost £900 million in tenant fees since the Tenant Fees Act came into force in 2019, according to new research – but who really ended up paying the price?
The report by tenant campaigning group Generation Rent estimates that tenants have saved £889 million on fees to date. They found 45% of tenants moving home were charged fees before 2019, paying an average of £249 for services such as inventories and referencing.
However, the act banned almost all non-refundable fees, capped holding deposits at one week’s rent, and limited tenancy deposits to five weeks’ rent in most cases.
According to Generation Rent CEO Ben Twomey, fees “gave agents a licence to print money” while making it difficult for tenants to compare the true cost of renting homes.
But agents and landlords have hit back at the report, claiming agencies made up for the loss of fee income by increasing rents, leaving tenants worse off overall. According to John Redden, Partner at Belvoir Tynedale, “on average each tenant has paid between £720 and £960 (some much more) to save £250.”
Who paid the bill?
As critics of the report point out, rents are rising fast. The HomeLet Rental Index for June 2019 (when the Tenant Fees Act came into effect) found the average UK rent was £941 per month. Their latest data, for May 2025, found a much higher average rent of £1,307 – more than if rents had just increased with inflation.
But most of that growth happened after the pandemic. In the first year after the Tenant Fees Act came into effect, year-on-year rental growth was just 1.1%. Private rents didn’t start to take off until 2021 and increases peaked in 2022 and 2023, several years after the fees ban.
Rental growth has also been driven by high demand, shrinking supply, and increased costs to landlords from mortgages, taxes and more – making it difficult to determine just how big an effect the Tenant Fees Act had.
Last year, the Centre for Economic Performance (CEP) at the London School of Economics tried to work out the real impact. They found that around two thirds of letting agents increased the fees they charged landlords in the wake of the new rules, but only by enough to recover 25% of the lost fees on average.
Unlike tenants, who were often only informed about the fees once they had decided on a property, CEP says landlords were able to compare fees and switch to cheaper agencies after the fees ban. Overall, they estimate that tenants saved about £400 per tenancy, and that the ban didn’t lead to increased rents or push landlords out of the market.
Their report also shows the resilience and adaptability of letting agencies, finding that there was no increase in agency closures following the ban. Agencies that previously charged high fees also saw their average review scores improve after the ban.
