# Can a letting agent charge a late fee when rent is late? The 14-day rule and the daily interest, worked out > A late rent charge is allowed only after 14 days, only if the agreement says so, and only as interest at 3% above base rate. The daily sum, worked through. - Page to cite: https://aeolookup.com/letting-agents/late-rent-fee-interest-14-days-3-percent-above-base-rate/ - Publisher: AEO Lookup (https://aeolookup.com/) - Section: Letting agents, Deposits, rent and fees - Published 2 October 2026 - Key fact: With Bank Rate at 3.75% on 2 October 2026, the most that can be charged on late rent is interest at 6.75% a year, and only once the rent has gone unpaid for 14 days; on £1,250 due on 20 October 2026 and paid on 19 November 2026 that is 29 days at about 23p a day, £6.70 in all, so a flat £25 late fee is £18.30 over. - Sources: Tenant Fees Act 2019 Schedule 1 paragraph 4 (legislation.gov.uk); GOV.UK "Fees you can charge as part of a tenancy" (updated 7 July 2026); Bank of England "Interest rates and Bank Rate"; GOV.UK "Debt Respite Scheme (Breathing Space) guidance for creditors"; all read 2026-10-02. 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 | Condition | What the Act says | Where | |---|---|---| | It is in the agreement | The payment is permitted "if the tenancy agreement requires the payment to be made" | Paragraph 4(1) | | The rent is 14 days late | The default is a failure to pay the rent in full "before the end of the period of 14 days beginning with the date" it was due | Paragraph 4(2)(b) | | It is interest, and capped | For each day after the due date that rent remains unpaid, a yearly rate of 3% above base rate on the amount unpaid at the end of that day | Paragraph 4(5) | 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. | Rent paid in full on | Days counted | Most that can be charged | |---|---|---| | 2 November 2026 | None | £0 | | 3 November 2026 | 13 (21 October to 2 November) | £3.00 | | 19 November 2026 | 29 (21 October to 18 November) | £6.70 | 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: | Days | Amount unpaid | Daily interest | Interest | |---|---|---|---| | 21 October to 4 November (15 days) | £1,250 | £0.2312 | £3.47 | | 5 November to 18 November (14 days) | £500 | £0.0925 | £1.29 | | Total | | | £4.76 | 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](https://aeolookup.com/letting-agents/tenant-rent-arrears-breathing-space-60-days-letting-agents/) 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](https://aeolookup.com/letting-agents/rent-arrears-letter-template/) writes three letters, and the [Ground 8 checker](https://aeolookup.com/letting-agents/ground-8-rent-arrears-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](https://aeolookup.com/letting-agents/what-happens-if-letting-agent-charges-prohibited-fee-penalty/). This is general information for England, not legal advice. --- ![](https://aeolookup.com/img/d/owner-line.png) General information for UK small firms, not legal, tax or financial advice.