'Pet rent' is a glaring loophole in the new Tenant Fees Act
For many years, residential landlords in the UK have faced scrutiny over their forever rising letting fees. The government finally took action this summer with the introduction of the Tenant Fees Act, which bans many of the more egregious practices. But some landlords are fighting back by charging tenants an entirely new rent: 'pet rent'.
It means a family with a dog and two cats would face a yearly animal rent of over £1,400.
The Tenant Fees Act covers most private tenancies, including assured shorthold tenancies, student housing and lodger agreements. It prohibits landlords from charging fees on the start or renewal of a tenancy from 1 June this year except in certain circumstances. These include:
- Late payment of rent – A tenant can only be charged a late payment fee once the rent is more than 14 days late. The late payment fee must be mentioned in the agreement and can't be more than 3%APR above the Bank of England base rate. A tenant can only be charged by the landlord or the agent and not both.
- Lost keys
- Changing or assigning a tenancy – The landlord can only charge £50 for this.
- Renewing a fixed term tenancy signed – This only applies if the tenancy agreement was signed before 1 June.
The Act seems like a positive move in the rental market and it is estimated it will save renters across England up to £240m a year.
However, a national newspaper investigation claims to have found that those tenants with four-legged friends could now be facing unfair penalisation through what landlords are calling 'pet rent'. This is seen as a ruse by landlords to recoup revenue lost following the tenant fee ban.
The newly introduced practice means that those tenants with pets can be charged up to £50 a month additional rent for a single pet.
Before the enforcement of the Tenant Fees Act 2019, landlords often asked for pet deposits of around £150, which was repayable at the end of the tenancy.
Under the new Act, where the annual rent is less than £50,000 per year, the maximum tenancy deposit allowed is five weeks. As a result of this, landlords have less leeway to charge an additional deposit for tenant with pets. Instead, (and presumably as a means of increasing the income from their property), landlords are demanding additional rent for pets. For many people, this is adding considerably to the cost of housing at a time when more and more families are priced out of buying and rely on rented homes.
Examples outlined by the investigation include one landlord in Bicester in Oxfordshire who is asking £40 per pet per month in a two-bedroom home that already costs £995 a month. It means a family with a dog and two cats would face a yearly animal rent of over £1,400. Another landlord in Cheltenham is asking £50 a month for "four-legged friends", with exemptions for fish or hamsters. Several landlords are seeking pet rent only for "clawed" pets.
Research by The Negotiator on the top three property portals (Rightmove, On the Market and Zoopla) found more than 160 properties offered in and around London that stipulate additional monthly rent of between £15 and £25 for pets. Some are asking even more.
The fact that landlords can demand this additional rent appears to be a gaping loophole in the Tenant Fees Act 2019. The Act does not prohibit charges or rent for animals.
Lucy Morton, head of residential agency at JLL, warns: "Landlords who allow tenants to keep pets usually do so by charging a slightly higher deposit which would cover any damage or additional cleaning should it be required. With the five-week deposit cap, landlords may be deterred from letting to tenants with pets or forced to charge higher rents to cover any potential losses."
JLL says the increase would depend on the rental value, but it anticipates a rise of three to four per cent. It suggests that a London property with a rent of £700 per week could potentially rise to £725 per week to make up for the shortfall.
This leads many to question whether the government should have prohibited deposits of more than five-weeks rent or whether they should have just capped costs to stop unruly charges such as pet rent.
Morton continues: "The government needs to be careful not to completely deter buy-to-let landlords – they are an essential part of the overall housing market, providing a home for those who choose to rent, and people with pets shouldn't be made to lose out."If you have any queries regarding the above article, please contact Robyn Worley at [email protected].