Can a letting agent charge a late fee when rent is late? The 14-day rule and the daily interest, worked out

Yes, but only as interest, and only after a fortnight. Under Schedule 1, paragraph 4 of the Tenant Fees Act 2019 a charge for late rent is allowed if the tenancy agreement provides for it, the rent has gone unpaid for 14 days, and the amount is no more than interest at 3% above the Bank of England base rate on what is still owed. Bank Rate was 3.75% on 2 October 2026, so the ceiling is 6.75% a year. Anything above that is a prohibited payment.

The three conditions

GOV.UK's guide for landlords and agents puts it in plainer words: "Rent must be overdue by at least 2 weeks before you can charge a fee", and "You can only charge a fee on the amount that is overdue."

The 14 days decide whether you can charge at all. They are not taken off the bill. The due date is day 1 of the 14, and once day 14 ends with rent still owing, interest is counted for every day after the due date, including the days inside the fortnight.

A flat fee has no place in this. A "£25 late payment charge" in an old agreement is not on the list of payments the Act permits, and GOV.UK says: "You cannot charge your tenant any payment that is not on this list."

One missed payment, worked through

Take a tenancy at £1,250 a month with rent due on the 20th and a late payment clause in the agreement. The payment due on Tuesday 20 October 2026 does not arrive.

1. The rate. 3.75% plus 3% is 6.75% a year.
2. The daily amount. £1,250 × 6.75% is £84.375 a year. Divided by 365 that is £0.2312 a day, about 23p.
3. The 14 days. 20 October is day 1, so day 14 is Monday 2 November 2026. If the rent is paid in full on or before that day, nothing can be charged.
4. The count. From Tuesday 3 November a charge can be made. Count each day after the due date that closed with rent still unpaid, starting with 21 October.

The day of payment is not counted, because nothing is unpaid at the end of it. Round down: 29 × £0.2312 is £6.7038, and £6.71 would be over the cap.

A flat £25 fee for the same late payment is £18.30 more than the Act allows.

The Act gives a yearly rate and does not say how to make it a daily one. We divided by 365.

Part payments and a change in Bank Rate

GOV.UK says that when the amount owed changes, "you should recalculate the new sum". Suppose the tenant pays £750 on 5 November and the last £500 on 19 November:

The same goes for the rate. The Bank of England gives 5 November 2026 as the date of its next decision; if Bank Rate moves, the days after the change are counted at the new rate. Our sums assume it stays at 3.75%.

Who can charge, and when not to

• Once for each default. If the landlord has charged for a late payment, the agent cannot charge for the same one, and the reverse is also true (paragraph 4(7) and (8)).
• Case by case. GOV.UK says a fee "may not be appropriate" where the tenant gave a reasonable explanation and notice of the delay. Its two examples of causes outside the tenant's control are "banking systems are down" and "delayed Housing Benefit or Universal Credit payments".
• Not during a Breathing Space. The government's guidance for creditors says the scheme freezes most interest and charges on the debts it covers. Our guide to the 60 days of a Breathing Space has the detail.

What the interest will and will not do

On one month's rent the lawful charge is a few pounds, which will not pay for the time spent chasing. What gets rent paid is early contact in writing: our rent arrears letter maker writes three letters, and the Ground 8 checker shows when three months' rent is owed. On this tenancy that is £3,750, and the interest on the whole of it is still only 69p a day.

Wording for the agreement and the fee list

A clause to adapt:

If any rent is not paid in full within 14 days of the date it is due, the landlord may charge interest on the unpaid amount at 3% above the Bank of England base rate, worked out daily from the day after the due date until the rent is paid.

GOV.UK says letting agents must publish a list of fees on their website, so put the same sentence there and take out any flat late fee. When you do charge, show the working on the rent statement: the amount unpaid, the dates, the number of days, the rate and the total.

A charge above the cap is a prohibited payment. The tenant can recover the excess, and the council can impose a penalty of up to £5,000; see what happens if a letting agent charges a prohibited fee.

This is general information for England, not legal advice.