The structure: everything is prohibited unless it is permitted
Section 3(1) of the Tenant Fees Act 2019 says a payment is a prohibited payment unless it is a permitted payment by virtue of Schedule 1. That is the opposite of how most fee schedules are written. You do not start from what seems reasonable and check whether it is banned; you start from the Schedule 1 list and check whether what you charge is on it.
Section 4 makes a term breaching s.1 or s.2 not binding on a relevant person, and a loan required in breach repayable on demand. The Act commenced on 1 June 2019 for new, renewed and continued tenancies, and became fully retrospective on 1 June 2020 by operation of s.30(5). Schedule 2, on holding deposits, applies only to holding deposits paid after 1 June 2019 and was never retrospective.
What changed on 1 May 2026
Three things at once, and they interact.
Section 17 was repealed. The rule that a landlord could not serve a section 21 notice while holding an unlawful fee is gone, omitted by the Renters' Rights Act 2025. It would be moot anyway, because section 21 was abolished the same day. Any guidance still citing it — and a great deal of it is still online — is describing a world that ended in May.
Schedule 1 gained new paragraphs. Paragraph 1(1A) makes rent payable before an assured tenancy is entered into a prohibited payment. Paragraph 1A is an anti-rent-loading provision: the excess of an earlier period's rent over a later period's is prohibited, compared across the first twelve months, ignoring contractual reviews and post-agreement variations.
A new section 5A appeared. It creates a separate breach for a landlord or letting agent to invite, encourage, accept an offer of, or accept a prohibited pre-tenancy rent payment. The point of it is to close the argument that the tenant volunteered.
Where this lands in the accounts
Holding deposits are the practical accounting problem, because they are client money in the window before they are applied or repaid, and because the seven-day repayment deadline is shorter than most month-end routines. They need to be visible as a balance with a date attached, not buried in a client account total.
The permitted variation fee — the greater of £50 or reasonable evidenced costs — is the other one worth watching, because “evidenced” means you need the evidence at the time rather than a policy that says the costs are reasonable. And the default interest cap of 3% above base is a calculation, not a flat charge, so it has to be worked out per tenancy rather than set once in the system.
Common questions
What can we actually charge a tenant?
Only what Schedule 1 permits, because s.3(1) makes every payment prohibited unless it is a permitted payment. The list is short: rent; a tenancy deposit; a holding deposit capped at one week's rent; two default payments and no others; damages for breach; a variation, assignment or novation fee capped at the greater of £50 or reasonable evidenced costs; early termination at the tenant's request; and council tax, utilities, TV licence and communication services where the tenancy requires them. The two permitted defaults are a lost key or security device, limited to costs reasonably incurred and evidenced in writing to the tenant, and rent unpaid fourteen days after its due date, where interest is capped at 3% above the Bank of England base rate. Charging both landlord and agent for the same default is prohibited.
What is the deposit cap?
Five weeks' rent where the annual rent is less than £50,000, and six weeks' where it is £50,000 or more. One week's rent means the annual rent immediately after the grant, renewal or continuance divided by 52. It has applied since 1 June 2019. At the top end, MHCLG guidance states that tenancies with annual rent exceeding £100,000 fall outside the Act altogether — the mechanism being s.28 read with Housing Act 1988 Schedule 1 para 2, since a tenancy at rent exceeding £100,000 a year cannot be an assured tenancy. The holding deposit is separate and capped at one week's rent, with only one held at a time per property.
What are the holding deposit rules?
Tighter than most agencies operate. The deadline for agreement is the fifteenth day of the period beginning with the day you receive it, unless a different deadline is agreed in writing. Repayment is due within seven days of the relevant date. It must be repaid if the tenancy is entered into, if the landlord decides not to proceed before the deadline, or if the parties fail to agree by the deadline. It may be retained in defined cases: applied to first rent or the deposit with the tenant's consent; where immigration status prohibits the tenancy and neither party knew or ought to have known; where the tenant gave false or misleading information the landlord may reasonably take into account; where the tenant withdraws; or where you took all reasonable steps and the tenant did not. Paragraph 13 overrides all of those if you yourself breached the fee rules or behaved so unreasonably the tenant cannot reasonably be expected to proceed.
Has the enforcement position changed?
Yes, substantially, on 1 May 2026 — and the change removed the lever agents were most often warned about. Section 17, which prevented a landlord serving a section 21 notice while holding an unlawful fee, was omitted by the Renters' Rights Act 2025. Section 21 itself was abolished the same day, so the lever is gone twice over. Anything you read online repeating that position is out of date. What remains is more direct: a civil penalty of up to £5,000 for a first breach, proved beyond reasonable doubt; a criminal offence with an unlimited fine for a further breach within five years of a penalty or conviction for a different breach of the same section; a financial penalty of £5,000 to £30,000 as an alternative to prosecution; and the tenant's own route to the First-tier Tribunal under s.15(3) to recover the payment, with no time limit stated in the section.
What are the new pre-tenancy rent rules?
A blanket prohibition, binding agents directly. Section 9 of the Renters' Rights Act 2025 prohibits rent in advance before an assured tenancy is entered into, and it catches inviting it, encouraging it, accepting an offer of it and accepting it — whether it is paid to you or to a third party. Section 8 then inserts s.4B, making terms providing for rent to be due in advance of no effect, while s.4B(2)(c) permits initial rent during the permitted pre-tenancy period, meaning rent for the first rent period or any later period ending within the first 28 days. The government's guide puts the net effect simply: up to one month's rent, or 28 days for tenancies under a month, only after the agreement is signed, and nothing before it. A new s.5A in the Tenant Fees Act creates a separate breach for inviting or accepting a prohibited pre-tenancy payment, closing the “the tenant offered it” route.
Do the rental bidding rules apply to us?
Squarely. Section 56 binds a relevant person, defined as the prospective landlord or a person acting, or purporting to act, directly or indirectly on their behalf — which is a letting agent. When you advertise in writing you must state a specific proposed rent, and you may not invite or encourage an offer above it, or accept one. A sign at the dwelling that merely says “to let” is exempt. The government's guide gives penalties of up to £7,000 for an initial breach and up to £40,000 for repeat or serious breaches, with agents able to receive multiple penalties. Those figures come from the guide rather than from s.56 itself, which contains no penalty provision — enforcement sits elsewhere in the Act.
Does any of this apply in Wales?
No — Wales has its own Act, and it is meaningfully different. The Tenant Fees Act extends to England and Wales but applies only to a tenancy of housing in England. Wales is governed by the Renting Homes (Fees, Discrimination etc.) (Wales) Act 2019, in force from 1 September 2019, which applies to standard occupation contracts under the Renting Homes (Wales) Act 2016. The structural difference is that a prohibited payment in Wales is an offence from the outset rather than a civil penalty first, with a £1,000 fixed penalty notice available and enforcement by local housing authorities. Deposit and default caps in Wales are set by regulations rather than on the face of the Act, so we will not quote you an English figure and call it Welsh. Wales has also added Part 2A discrimination provisions and retains its analogue of the English section that was repealed.