New licence fees for letting and management agents in Wales have been announced after a furious backlash by smaller agents and a number of landlords.

Backed by various membership bodies, they were protesting at the huge £3,728 licence cost – the same for very small agents as for very large ones.

Under the new fee structure, the licence costs will now be based on the number of properties managed.

Smaller agents will now pay less – although still much more than for a local authority licensing scheme over the border in England – while larger agents will pay considerably more.

The scheme is not meant to make profits.

Costs will range from £1,890 to £6,600 for a five-year licence.

The costs will also vary, depending on whether the agent is a member of a recognised body such as ARLA, NALS and UKALA, and whether the licence application is made online or on paper.

In Wales, all agents must be licensed by law under the Rent Smart Wales scheme.

Landlords must be registered, but also licensed in many circumstances.

Landlords and agents who let and manage property must get a licence by making a declaration that they are ‘fit and proper’ to hold a licence and passing approved training.

The scheme is operated by Cardiff Council and the new fee structure kicks in from late next month.

Cabinet member for environment, Cllr Bob Derbyshire, said: “Since the launch of Rent Smart Wales in November, the broad consensus in relation to the cost of agent licences has been that change is necessary.

“The City Council has taken on the feedback and reviewed the fees to reflect comments received. The consensus was that the fee structure should reflect the size of the business.

“Rent Smart Wales aims to professionalise the private rented sector by promoting the need for compliance with the law and providing good safe housing for tenants.

“The costs of delivering the scheme have to be met, but this is a unique scheme in the UK and there will therefore be areas where we will be able to learn from experience.

“We are particularly grateful to the professional agent bodies who have contributed their views during this review process.”

Landlords and agents are currently in a period of grace.

They have until November 23 to comply with their new legal obligations without fear of legal action. However, they are warned that they need to plan early as it will take time for licence applications to be processed.

Isobel Thomson of NALS said: “We are delighted that Rent Smart Wales has recognised that agents who are part of regulatory organisations such as NALS are more likely to already have embraced the requirements of the licensing scheme and less likely to generate complaints or breaches of their licence.

“We also believe that the new pricing structure which takes into account the size of a firm’s portfolio is a fairer method of calculating the registration fee rather than a ‘one size fits all’ fee.”