England operates one of the most restrictive late fee regimes in the world for residential tenancies. The Tenant Fees Act 2019 severely limits what a landlord can charge when a tenant pays rent late, essentially prohibiting traditional "late fees" entirely and permitting only a capped interest charge.

The Tenant Fees Act 2019 Framework

Under the Act, a landlord cannot charge a flat-rate late fee (e.g., "£50 per late payment"). The only permitted default charge for late rent is:

Interest at a rate not exceeding 3% above the Bank of England base rate, calculated on the amount of rent outstanding from the date it became due.

This interest can only be charged once rent has been outstanding for 14 days or more. Rent that is 1-13 days late cannot attract any financial penalty whatsoever.

[!CAUTION] Charging Banned Fees: Demanding any payment beyond the permitted interest charge (e.g., a £100 "admin fee" for late payment) is a breach of the Tenant Fees Act 2019. With the Renters’ Rights Act 2025 (effective 1 May 2026), initial breaches attract a civil penalty of up to £7,000; repeated offences within 5 years can lead to fines of up to £40,000 or an unlimited fine for serious offenders.

Calculating the Interest Charge

Example: If the Bank of England base rate is 4.5%, the maximum permissible interest rate on overdue rent is 7.5% per annum (4.5% + 3%).

For a tenant who owes £1,200 in monthly rent and is 30 days overdue (16 days after the 14-day grace period):

• Daily interest rate: 7.5% ÷ 365 = 0.02055%
• Interest for 16 chargeable days: £1,200 × 0.02055% × 16 = £3.95

Other Permitted Default Charges

The Tenant Fees Act 2019 permits landlords to charge tenants for specific defaults beyond late rent:

• Lost Keys: A reasonable charge for replacing locks and keys, supported by evidence of costs.
• Early Termination: With the introduction of the Renters’ Rights Act 2025 (effective 1 May 2026), all new and existing tenancies will become periodic. Tenants can end a tenancy at any time by providing two months' written notice, incurring no fees. If a tenant requests to end the tenancy sooner than their two-month notice period, the landlord can charge a fee. This fee is strictly capped at the landlord's actual proven financial loss (e.g., loss of rent until a new tenant moves in, or reasonable costs for re-advertising and referencing a replacement tenant).

Track English Arrears Precisely

Calculating interest at 3% above a fluctuating Bank of England base rate across multiple tenancies is complex and error-prone. Landager automatically applies the correct BoE-linked interest rate to late rent balances, ensuring your charges are always compliant with the Tenant Fees Act 2019.

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