Letting agencies across the country have come under fire today for charging fees of up to £350 on top of the deposit and rent payments tenants have to pay. The housing charity Shelter recently undertook a ‘secret shopper’ exercise in order to find out how much letting agents are charging their customers on average, and the results have shocked and angered both the charity and those working in the private rented sector.
Landlords who have other occupations or large property portfolios often use letting agents to help them manage their businesses; and usually pay a substantial sum for these services. This is why many are confused as to why letting agents are also charging tenants for services which have been described as ‘administration’ or ‘check-in’ fees. Discussing the issue, chief executive of Shelter Campbell Robb said: “Letting agency fees have become truly out of control. When renters have to find hundreds of pounds in fees each time they move – on top of deposits and rent in advance – it’s not surprising that fees are causing real financial hardship and, in some cases, preventing people from moving at all.”
“The high demand for rented homes means renters can’t shop around, but instead have to deal with the letting agency their landlord has chosen. They have no choice but to swallow their anger and stump up their cash.” Meanwhile, housing minister Mark Prisk has also weighed in on the issue and said: “While most letting agents offer a good service, clearly some of the practices highlighted in this report are a cause for concern. I agree with Shelter that we need to take action to drive up standards in the sector. But a blanket ban cannot be the answer to tackle a minority of irresponsible agents.”
“We are already changing the law to require all letting and managing agents to belong to an approved redress scheme, which will give tenants an effective way to address complaints. And the Advertising Standards Authority have been clear that all fees and charges must be available up front so that tenants know what to expect when they sign on the dotted line.” Some have argued that if letting agencies no longer charge tenants for their services landlords will have to foot the bill on top of their mortgage and landlord insurance payments which will ultimately lead to rent prices increasing. It seems as though a blanket ban may therefore not be appropriate, but changes will have to be made to the way the letting agent industry works.