Letting agents in England will no longer be able to charge upfront fees to tenants, following a ban announced today by Chanceillor Philip Hammond in the Autumn Statement.

Some letting agents have been charging prospective tenants hundreds of pounds in upfront fees in order to bag a rental property, despite also charging the landlord for their service. Now the fees to tenants will be banned.

On the face of it this is good news, with tenants set to save significant sums from the new rule. But some have questioned whether they will be indirectly hit as the costs simply get shifted around. It’s been suggested that letting agents will make up for the loss in income by hiking their fees to landlords who in turn, could raise rents.

However, Stephen Smith, director of Legal & General Housing Partnerships thought it was a positive move: “Renters from every walk of life, be it students, young couples or professionals starting their careers will be relieved by Hammond’s decisive action today. The removal of these punitive fees will help to alleviate some of the financial pressures tenants have suffered whilst trying to find affordable, quality homes to rent.

“Contrary to initial speculation, the implementation of this policy in Scotland in 2012 does not seem to have had a negative impact either on rents or on the availability of private rented accommodation.”

John Eastgate, sales and marketing director of OneSavings Bank, said he expected renters to bear the brunt of likely added costs imposed on landlords. “Renters will inevitably pay for the further cost on landlords through increased rents, so it’s hard not to see the move as two steps forward, one step back for housing policy.”

The ban in set to come into force ‘as soon as possible’ according to the Chancellor.