Once again, letting agents’ fees are in the spotlight with pressure ramping up.
Two MPs have signed an Early Day Motion calling for their ban.
The EDM tabled by LibDem Tom Brake and veteran Tory Peter Bottomley supports a Private Member’s Bill which has had an unopposed second reading in the Lords and seeks to ban fees.
The EDM reads as follows:
“That this House notes that the number of private renters in Britain is growing and now sits at 18% of the population; recognises that the rising demand for rented homes and shortage of genuinely affordable housing is pushing up costs and allowing some landlords and letting agents to take advantage of tenants who have relatively little power to object to high prices or poor conditions; acknowledges that the law needs to change to make renting cheaper, safer and more secure for tenants and that the Renters’ Rights Bill is one opportunity to do this; and calls on the Government to reduce the upfront costs of moving by banning letting agents from charging fees to tenants, to make renting safer through mandatory electrical checks and to allow tenants to have access to the database of rogue landlords and property agents.”
Meanwhile, in Southend, the council is under pressure to name and shame agents who charge tenants “extortionate” fees, and in Oxford a survey by Citizens Advice has found a huge variation in fees, also leading to calls to name and shame.
In a mystery shopping exercise of 42 un-named letting agents in Oxford, Citizens Advice found three agents charging over £350 to check a tenant’s references, with others charging £15 for the same service.
Frank Webster, director of Oxford agency Finders Keepers, said he has lobbied ARLA for a countrywide set of charges.
In Southend, Cllrs Tino Callaghan and Laurence Davies are preparing a report into letting agent fees.
Davies said: “People don’t realise how much it costs to rent. My daughter has rented a property and had to find a month’s rent, a month’s deposit, a £200 administration fee and £300 for a credit check.
“They are charging more and more but these people are struggling. It’s horrendous what they charge and people just can’t afford it.
“One estate agent I called wanted a £360 administration fee, £90 per adult for a credit check on top of the deposit and rent advance which came to about £3,000. In addition you have to pay £125 administration fee to renew the lease every year. This is why we have so much homelessness.
“Laurence and I are hoping we can get some feedback on it. Under Scottish law it’s illegal to charge an administration fee. We need something like that.”
One agent agent charges loads, another agent doesnt, shocker. Doesnt say they used the more expensive agent, just called them. Davies should try moaning about the fees for buying a house, £1k set up fee £400 – £700 survey fee, mortgage paid in advance- £700 plus 10 – 20% deposit.
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Once again a massive waste of time. Let’s not look at agent fees let’s look at the shortage of housing and start imposing fines against landlords who rent property in such poor condition instead of putting laws in place and not penalising people that break them!
Banning agent fees will only make it even more expensive for tenants in the long run because an agent need sufficient income to run a business and in order to run a business, you have to charge surplus amounts on referencing like a contractor will charge for labour or extra on top of materials.
Or the government bans fees to which the agent will add to the landlord to which the landlord will add to the Rent to which will be more expensive for the tenant…..
Great idea!! lets once again to Screw over the people we are trying to help
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More out of touch officials who just don’t get it! Next will be restaurants that charge more for an omelette than the price of the eggs required to make it; I suspect they might complain if the restaurant sacked the chef and just gave them a pan and a box of eggs when they arrive with their cronies for the lunch that you and I are paying for with their expenses!
“Goes to key safe and hands key to complete stranger who happens to be walking past and looks as if he would appreciate living in someone else’s £500,000 house – no need to worry – as long as that house doesn’t belong to an mp or councillor, just an honest landlord shafted by his mp or councillor!”
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Look no further than Scotland where fees were banned and surprise surprise rents went up by over 10% as fees were passed onto landlords…….. Lets sort out the rouge agents , put some industry regulation in place and stop this argument once and for all…… Im off to pay my bank charges …
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Which Scotland are you talking about? Rents did not rise and fees were not passed onto Landlords. The only losers where the Agents who undercut their competion to get the Landlords Instruction by charging low management fees and making up by charging excessive tenant fees….which by the way have been illegal in Scotland. Tenants fees started to slip in by English based agents expanding into Scotland
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Can i just clarify a point, the fees weren’t’ made illegal, the law was clarified about fees, so no new law was passed it was simply clarified
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Before they start banning fees, or making noises about doing so, why don’t they publicise those of us that charge a fair fee for a professional service?
Maybe they should come and work in one of our offices for a week, not a day or an hour but a week, to see what these fees pay for.
The ongoing stranglehold that parliament seem intent in putting on agents WILL cause a rise in poor living conditions, higher rents, and rogue agents. Personally I’m sick to the back teeth of whingers moaning about having to pay for a service that provides them with a good home.
I refuse to believe that there are more rogue agents and agents that charge extortionate fees to justify all this rubbish!!
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Good to see Conservative and Liberal Democrat MPs pushing for state interference into the free market.
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is it really a free market for a tenant? The tenant likes a property but has no option to use an agent and pay their fees (if there is an agent involved)
Yes, they could find somewhere else, but that is not easy if they like the house because of location or when it is becoming available etc. The tenant is almost “blackmailed” into paying the fee. Strong word, but that is how many tenants feel.
I agree letting agents need to make money, but mark ups of 500% for referencing (which is commonplace) when in many cases this is done in its entirety by the referencing company i.e. they send a link to the tenant to complete. Having been a tenant, being charged £60 by a letting agent for having a credit check/referencing, when I know that X referencing company only charge £10 to the letting agent because of the volume of work they receive from them.
I m fully aware of the costs of running an agency, having owned one myself and having recently worked for a large London agency but sadly the majority of the good smaller agents, are being stung by the behavior of the bigger corporate agents (especially in London, where there is very little tenant choice).
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Ding Dong, its good to hear your balanced response, very refreshing so thank you!
One thing that does need to be clarified though if I may, the fees are not just for the credit check. They are to keep the reference on course, set the tenancy up, contribute to drawing up the tenancy agreement, contribute to the inventory, make sure the property is compliant, check you in and deal with the subsequent deposit registration and utility readings.
I estimate this all takes about 2 days to complete overall. We charge £325 for a couple and I know plumbers round where I am (who are not qualified plumbers but good at what they do) who charge £300 per day + materials.
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As a former tenant who had been served three s21 notices over three years, I had to find over £1,000 for admin fees etc. This does reinforce the argument that agents do encourage landlords to evict, so that they can pocket the admin fees.
As for the agents who work on the AST, in all cases there was a standard AST issued straight from the computer, with no adjustment for the particular property, or circumstances. It took me time to make amends, which were actually accepted by the agent and landlords. I put in more time than the agents did. Many of the clauses also would not stand up if a case went before a magistrate, and are not necessary, and are designed to intimidate the tenant. Keep to the facts, and what is legal.
There was a comment about the costs involved in buying a property, that is not relevant, as in the long term that person has security of tenure, and will profit form owning their own home. Besides, many mortgages do not require an application fee, the surveyor fee is a very small percentage of the cost of the house, and often leads to a reduction in the price paid. This author is trying to skew facts. And should live in three different rented properties for three years, each time paying over a £1,000 in costs for admin fees, and removal costs.
The private rental industry does need a massive overhaul, there are too many small landlords, unprofessional, and encouraged into that role by agents who misrepresent the returns.
Landlords and to be landlords do need to pay their taxes on properties, and there is a lot of fraud with landlords claiming that they live in a rental property, when they come to sell that property. Agents encourage this by stating to the tenant that letters that come to the house addressed to the landlord, have to be passed on. This is potentially illegal, and I always returned such letters as not known at this address.
I do work in the property industry, as a property professional.
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Just reading some of the comments here and it’s ridiculous . Agents do not do things for nothing. We provide a service that any customer has to pay for . I do think that banning fees is not the answer, but putting a limit on fees is the way forward. Everyone has a choice . If you are not happy using an agent and paying the fee, then go somewhere else . High street locations , portal fees , the cars we use to take you to viewings. These are not free .
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I tell you what once my overheads go down from £20,000 a month then I’ll reduce my tenant referencing fees, until that happens I’ll charge what I need to in order to make the business run. UFortunately I’m an accredited professional letting agent and I’m not government funded and it doesn’t say “shelter” above my shop therefore one has to make sufficient income in order to deliver a higher than average service as well as keep the lights on. I have to put food on the table for my daughter, pay my mortgage and my bills or shall I whine like every other narrow minded Naieve keyboard warrior with a short sighted solution to a bigger picture problem. I tell you what why don’t we abolish stamp duty? Or VAT? Or TV license???
The answer is NO to banning letting agent fees.
Build more houses. Actually impose and Govern penalties and fines instead of implementing legislation with no penalty. Wash out the bad
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