The rule is simpler than most landlords think, and stricter. Under the Tenant Fees Act 2019, every payment you ask a tenant for is banned unless it appears on a short statutory list. There is no “reasonable in the circumstances” test and no exception for costs you genuinely incurred.
Three things changed on 1 May 2026 when the Renters’ Rights Act commenced: rent in advance is now capped at one month, rental bidding is banned, and the fee restrictions now apply to every tenancy in England — including agreements signed before June 2019 that were previously outside the regime.
This guide sets out the complete list of what you can charge, the two deposit caps, the only two default fees that work, and the grey areas that most often produce a penalty notice. It is written for England.
Key takeaways
- If a payment isn’t a permitted payment, it is prohibited — regardless of how reasonable it seems or what your agreement says.
- Tenancy deposit: five weeks’ rent (annual rent under £50,000) or six weeks (£50,000+). Holding deposit: one week’s rent.
- Rent in advance is capped at one month, and cannot be taken before the agreement is signed.
- You must advertise a rent and cannot invite or accept offers above it.
- Only two default fees work: interest on rent 14+ days overdue at up to 3% above base rate, and the evidenced cost of replacing lost keys.
- Variations, assignments or novations at the tenant’s request are capped at £50 including VAT, or your reasonable costs if lower.
- Proposals for compulsory pet damage insurance were dropped before the Act passed. There is no separate pet deposit.
- Penalties: up to £5,000 for a first breach, up to £30,000 or prosecution for a repeat within five years.
The complete list of permitted payments
This is the whole list. Anything not on it cannot be charged to a tenant, a prospective tenant, a guarantor or anyone acting on their behalf.
| Permitted payment | Cap or condition |
|---|---|
| Rent | No cap, but no more than one month in advance, and it cannot be front-loaded to disguise a fee |
| Tenancy deposit | 5 weeks’ rent (annual rent under £50,000); 6 weeks (£50,000 or more) |
| Holding deposit | 1 week’s rent, one property at a time |
| Default fee: late rent | Interest only, max 3% above Bank of England base rate, only once 14+ days overdue, only if in the agreement |
| Default fee: lost keys | Reasonable, evidenced replacement cost, only if in the agreement |
| Variation, assignment or novation | £50 including VAT at the tenant’s request, or reasonable costs if lower |
| Early termination | At the tenant’s request only, and no more than your genuine loss |
| Utilities, communications, TV licence, council tax | Actual cost only, where the agreement makes the tenant responsible — no admin margin |
Everything else is prohibited. That includes referencing and credit checks, viewing fees, inventory and check-out fees, “admin” or tenancy set-up fees, guarantor arrangement fees, renewal fees, professional cleaning as a condition of the tenancy, and gardening or maintenance charges.
The two deposits, and how they differ
The tenancy deposit
Capped at five weeks’ rent where the annual rent is under £50,000, or six weeks at £50,000 and above. Calculate it from the annual rent, not the monthly figure — the arithmetic trips people up. On £1,200 a month, annual rent is £14,400, so the cap is five weeks: (£14,400 ÷ 52) × 5 = £1,384.61.
It must be protected in an authorised scheme within 30 days with prescribed information served. That matters more than it used to: since Section 21 was abolished, deposit non-compliance blocks possession under almost every Section 8 ground, not just the old no-fault route. See our deposit protection guide.
If you raise the rent during a tenancy, the cap moves with it — but you cannot demand a top-up that takes the deposit over the new cap, and taking too much makes the excess a prohibited payment.
The holding deposit
Capped at one week’s rent, and you may only hold one per property at a time. This is the area that generates the most enforcement action, because the timescales are tight and unforgiving.
- The deadline for agreement is the 15th day after you receive the holding deposit, unless you both agree a different date in writing.
- If it must be repaid, you have seven days from the relevant trigger — the tenancy being entered into, your decision not to proceed, or the deadline passing.
- It can be applied towards the first rent or the tenancy deposit with the tenant’s written consent.
You may only retain it in narrow circumstances: the tenant provides false or misleading information that materially affects your decision, the tenant fails a right to rent check, the tenant withdraws, or the tenant fails to take all reasonable steps to enter the agreement before the deadline. If you retain it, you must tell the tenant in writing why, within seven days.
Failing to refund on time is itself a breach, even where you were entitled to keep it but didn’t explain properly. Diarise the fifteenth day the moment the money arrives.
Default fees: only two really work
A default fee must be written into the tenancy agreement, and it must reflect a genuine loss. In practice only two survive scrutiny.
Late rent. You may charge interest, calculated daily, at no more than 3% above the Bank of England base rate, and only once the rent is 14 days or more overdue. With the base rate at 3.75% as at August 2026, that is a maximum of 6.75% annualised — roughly £3.70 on £1,000 held back for 20 days. A flat “£25 late fee” applied the day after the due date is a prohibited payment.
Lost keys or security devices. You may recover the reasonable cost of replacement, evidenced with receipts. You cannot add a call-out charge, an administration fee or your own time. If a lost fob means rekeying a communal system, that cost is recoverable if genuinely incurred and evidenced.
Note what is not a default fee: missed appointments, bounced payments, unauthorised pets, or breaching a tenancy term. Those are matters for the deposit at the end of the tenancy or, in serious cases, a possession ground.
New in 2026: rent in advance is capped
The Renters’ Rights Act closed the biggest remaining loophole. Large advance payments had become the standard workaround for tenants who referenced badly — students, the self-employed, overseas applicants.
The position now:
- You cannot require or accept any rent in advance before the tenancy agreement is signed.
- Once signed, you may take up to one month’s rent (or 28 days where the rent period is shorter) before the tenancy begins.
- After the tenancy starts, you cannot enforce a term requiring rent ahead of its due date.
- A tenant may choose to pay ahead voluntarily once the tenancy is running. You cannot ask for it, condition the tenancy on it, or advertise it as an option.
The practical answer for weak affordability is a properly referenced guarantor, not a bigger cheque. Our tenant referencing guide covers a compliant process.
New in 2026: no rental bidding
You must state an asking rent when you advertise, and you cannot invite, encourage or accept an offer above it. This applies to you and to any agent acting for you.
In practice: no “offers over”, no telling applicants that others have bid higher, no accepting an unprompted higher offer. If you have priced too low and the response is overwhelming, the lawful fix is to withdraw the advert and relist at a realistic rent — not to run an auction. Choose between applicants on referencing and suitability, keeping a note of your reasons.
New in 2026: the ban now covers every tenancy
Easy to miss, and it catches long-standing landlords. When the Tenant Fees Act came in, it applied to new and renewed tenancies from 1 June 2019, with older agreements phased in. The Renters’ Rights Act has now brought all tenancies within the regime.
If you have a tenant who signed in 2016 and an old clause entitles you to an annual renewal fee or a check-out charge, that clause is now unenforceable and demanding payment under it is a prohibited payment. Read through your legacy agreements rather than assuming they are grandfathered.
Pets, and the insurance that didn’t happen
Tenants can now request to keep a pet and you cannot unreasonably refuse. A lot of landlords believe they can offset the risk with a charge. They can’t.
The Bill originally allowed landlords to require tenants to take out pet damage insurance, or to reimburse the landlord’s cost of doing so, with an express exception in the Tenant Fees Act. That clause was removed before the Act passed and is not law. There is also no separate “pet deposit” — the five or six week cap is the whole of your security.
What you can do is recover genuine pet damage from the standard deposit at the end of the tenancy, exactly as with any other damage, supported by a check-in inventory. You can also take out your own insurance and absorb the premium. See refusing pets and defining pet rules.
The grey areas that catch landlords out
| Situation | Position |
|---|---|
| “Professional clean required at check-out” | Prohibited as a condition. Recover actual cleaning costs from the deposit only where the property is returned worse than at check-in |
| Charging for a check-out inventory | Prohibited |
| Charging to add a permitted occupier | Permitted only as a variation, capped at £50 |
| Bills-inclusive rent | Permitted — but the rent must be a genuine rent, not a rent plus a disguised service charge |
| Recharging council tax on an HMO | Actual cost only, and only where the agreement provides for it |
| Charging the guarantor a fee | Prohibited — the ban covers guarantors too |
| Tenant asks to leave early | Permitted, but limited to your genuine loss — typically rent to re-let plus reasonable re-letting costs |
| Renewal fee | Prohibited, and largely academic now that tenancies are periodic |
The early termination point deserves care. You may charge only what you actually lose, and you must be able to evidence it. Charging a fixed “two months’ rent” penalty regardless of how quickly you re-let is a prohibited payment. If you re-let after three weeks, three weeks is your loss.
On bills, if you are considering an inclusive rent, our guide on including bills in the tenancy weighs the trade-offs.
Penalties, and how tenants get their money back
Enforcement sits with local authority trading standards, and district councils can also enforce.
- First breach: a civil penalty of up to £5,000.
- Repeat breach within five years: a criminal offence, or a civil penalty of up to £30,000 as an alternative to prosecution.
- Conviction can also lead to a banning order and entry on the database of rogue landlords.
- The prohibited payment must be repaid, with interest, regardless of any penalty.
A tenant who has paid a prohibited fee can apply to the First-tier Tribunal to recover it, and can ask the council to take enforcement action. Applications are straightforward and inexpensive, which is why enforcement in this area is more common than landlords expect.
If you realise you have taken something you shouldn’t have, repay it promptly and in writing. Prompt voluntary repayment is a material factor in whether a penalty follows.
Common mistakes
- Assuming a clause in the agreement makes a charge lawful. It doesn’t. Statute overrides the contract.
- Calculating the deposit from monthly rent. Use the annual figure divided by 52.
- Missing the holding deposit deadlines. Fifteen days to agree, seven to repay.
- Still asking for six months up front. Now capped at one month, after signing.
- Accepting an unprompted higher offer. Still bidding, still banned.
- Relying on a pre-2019 agreement. All tenancies are now covered.
- Charging a flat early-termination penalty. Genuine loss only, evidenced.
What to do next
Take your standard tenancy agreement and read every clause that mentions money. Anything that isn’t rent, a capped deposit, one of the two default fees, or a £50 variation charge needs to come out — including in older agreements you assumed were exempt.
Then check your adverts show a fixed asking rent, and set a diary reminder the moment any holding deposit lands. Most breaches in this area aren’t greed; they’re old templates and missed deadlines. For the underlying legislation, see our companion guide to the Tenant Fees Act 2019.
Frequently asked questions
Can I still ask for six months’ or a year’s rent up front?
No. Since 1 May 2026 you can require no more than one month’s rent in advance, and only after the tenancy agreement has been signed. A tenant may pay ahead voluntarily once the tenancy is running, but you cannot ask for it or make the tenancy conditional on it.
What is the maximum deposit I can take?
Five weeks’ rent where the annual rent is under £50,000, or six weeks where it is £50,000 or more. A holding deposit is capped separately at one week’s rent. Calculate from annual rent divided by 52.
Can I charge a fee for late rent?
Only interest at up to 3% above the Bank of England base rate, calculated daily, once the rent is at least 14 days overdue, and only if the tenancy agreement provides for it. Flat late fees are prohibited.
Can I charge a pet deposit or require pet insurance?
No. The pet damage insurance provision was removed from the Renters’ Rights Bill before it became law, and there is no separate pet deposit. The standard five or six week cap applies, and pet damage is recovered from that deposit like any other damage.
When must I return a holding deposit?
Within seven days of the tenancy being entered into, your decision not to proceed, or the deadline for agreement passing. The deadline is the 15th day after you receive it unless you agree otherwise in writing. If you retain it, you must explain why in writing within seven days.
Do the rules apply to my old pre-2019 tenancy?
Yes. The Renters’ Rights Act extended the fee restrictions to all tenancies from 1 May 2026. Any clause in an older agreement requiring a prohibited payment is no longer enforceable.
What happens if I charge a banned fee?
A first breach can attract a civil penalty of up to £5,000. A repeat within five years is a criminal offence or a civil penalty of up to £30,000. You must repay the payment either way, and the tenant can apply to the First-tier Tribunal to recover it.
Written by the Landlords Portal team — experienced UK landlords covering the private rented sector in England. This article is general information, not legal advice. Enforcement practice varies between councils; check the current position or take professional advice before charging anything unusual.
