Letting agents and landlords in Wales are set to be banned from charging tenants fees.

Under the Renting Homes (Fees etc) (Wales) Bill, launched in the Welsh Assembly, they would only be allowed to charge rent, security deposit and a holding deposit.

The Bill also includes powers to cap both types of deposit.

Breaches could result in a £500 fixed penalty, or unlimited fines, and possibly the loss of their ability to trade: in Wales, all landlords must be registered, and all letting agents licensed under the Rent Smart Wales scheme.

Welsh housing minister Rebecca Evans said: “Fees charged by letting agents often present a significant barrier to many tenants, especially those on lower incomes.

“No longer will tenants be charged for an accompanied viewing, receiving an inventory or signing a contract.

“No longer will they be charged for renewing a tenancy. And no longer will they have to pay checkout fees when they move out.”

Welsh Conservative housing spokesman David Melding backed the Bill.

He said: “What we hope is that the Welsh Government are learning from the Scottish ban, and the scrutiny of the Westminster proposal, to ensure that the most efficient system is put in place in Wales.

“The outcome that we need and should be hoping to achieve is a housing sector that is fair and works for everyone.”

Douglas Haig, director for Wales of the Residential Landlords Association, said: “The complete ban on tenancy fees will simply place further pressure on landlords to review increases to the amount that they charge in rent to cover the costs set by letting agents.

“Ultimately it will increase the pressure on the most vulnerable in Wales as they will no longer get the assistance from agents to obtain a tenancy, and it shifts the cost on to long-term tenants who have enjoyed incredibly low rent rises way below inflation for many years.”

David Cox, CEO of ARLA Propertymark, said: “We have been awaiting the announcement of this Bill, given the scrutiny on tenant fees across the private rented sector. It’s no surprise that, as with the Tenant Fees Bill, the Welsh Assembly have decided on a total ban.

 “We do not believe the Bill will achieve its aims, as our own research last year demonstrated that tenants will end up worse off, and banning fees will not result in a more affordable private rented sector.

“We’ll be liaising with the Welsh Government to ensure they understand the consequences of what the ban will entail and how it will negatively impact all those involved in the private rented sector.”

Scotland introduced a ban on fees in 2012. The ban in England is due to take effect next April, although its timing will depend on when Client Money Protection is made mandatory as the Government has said it wants to implement this first.