Citizens Advice is stepping up its calls for a ban on lettings agent fees following a surge of complaints from tenants.
The organisation claims there should be one charge paid for by landlords as they are in a better position to shop around.
Citizens Advice says students and young people aged 17 to 24 are typically worst hit.
It says it helped people with 6,500 problems with letting agencies between July 2015 and June 2016, a 14% rise from the 5,700 problems reported two years ago.
The biggest rise was among 17 to 24-year-olds who sought help with 810 problems with letting agents in the last year, compared to 360 cases reported between July 2013 and June 2014.
Gillian Guy, chief executive of Citizens Advice, said: “Letting agents are hiking up their fees for a service that’s often not up to scratch.
“With fees rising year on year for letting agents, many tenants will rightly be wondering why they are paying hundreds of pounds for a simple contract renewal or for management services that leave them waiting months for essential repairs.
“It is concerning that younger renters are among the most likely to report problems with a letting agent, when many will end up using letting agents to find somewhere to live at university.
“Private renters shop around for properties, not for letting agents. Landlords are better able to choose agencies based on performance and cost, and it should therefore be landlords paying letting agent fees, not tenants picking up these rising costs.”
Responding to the report, David Cox, managing director of ARLA, said: “Picking the correct letting agent is an important starting point for students and young people renting their first home. One way of staving off any problems before, during or after a tenancy is to register with an ARLA letting agent, all of whom adhere to a strict code of conduct.
“This will help ensure tenants receive a high-quality professional service from the letting agent managing your tenancy.
“As well as regulating the services of letting agents, ARLA agents also monitored their costs. Letting agent fees cover the cost of essential items during the lettings process such as credit searches, right to rent checks, the drafting of the tenancy agreement, inventories and the management of tenancy extension or renewal. All of these items cost the letting agent money to carry out, and the fee covers the costs of these.”
Isobel Thomson, CEO of the National Approved Lettings Scheme, said: “The majority of letting agents provide an excellent service, but if they are not behaving professionally, or upholding their side of a contract then we absolutely expect tenants to report them. NALS wants to see more of this, to help stamp out the bad practices that put tenants at risk and affect our sector’s reputation.
“When it comes to fees, accessing any form of housing comes with a cost, and renting in the private rented sector is no different.
“It’s important to remember that letting agents are running businesses, and like any business should be able to reasonably charge for the work they do. The key word here is ‘reasonable’ – some of the fees stated in the CAB report are clearly excessive and are not typical of the average fees NALS agents charge.”
Why would a 17 year old be having problems with a letting agent, when they can’t legally enter a contract? It rather invalidates the argument from the start.
Perhaps us Letting Agents should go to CAB when we are having problems with a prospective tenants messing us around with inaccurate information! Perhaps then CAB would see the other side of the story.
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Might not be a bad thing if its worded that we act for the landlord as you the tenant are not paying anything. A lot of seemingly nice people turn into complete w&&&kers as soon as they break a toilet seat and want the landlord to fix it.
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Pay nothing upfront, but pay more over the course of a long term tenancy. CAB, Shelter and Generation Rent need to get a grip and look at other industries. Take furniture as an example do we really think that not paying for our furniture upfront is getting the consumer a better deal? Prices are manipulated in a long term business plan to subsidise the no money down option. In the rental industry, the only people that will truly lose out are the long term renters.
Why does CAB and others not work with the Industry, Portals and Legislators to create a system where Portals are forced to display, our fees alongside the rent on the ‘Front Search Page’ of their sites.
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Having two sons at Uni, I can understand the concern about fees when I see what agents are now charging them; way too high in my opinion.
“The organisation claims there should be one charge paid for by landlords as they are in a better position to shop around.”
True in that landlords choose the agent and tenants choose the property, so whereas some agents will buy the business in by reducing landlord fees, there is no need to encourage tenants in the same way.
Maybe the way forward is not to ban tenant fees, I firmly believe that tenants should contribute to agents costs, but to include tenant fees to landlords under a separate heading in the landlord charges guide. This might well make landlords consider the bigger picture and high tenant fees could lose then a prospective tenant, I know one of my sons did exactly that as the agent’s tenant fees were ridiculously high.
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Should just be a £195 cap on fee to tenants. At end of day , staff aren’t cheap and any poor soul who ends up in a lettings department deserves to be paid well. Tenants attitudes generally stink at the moment and it comes from organsiations like citizans advice fuling the fire
the same citizans advice who gives free pension advice to paper millionaires. what a system.
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Hmmmm some of the worst lettings agents I have come across are ARLA member particularly when it comes to fees. The complaint of extortionate agents fees is sometimes well founded but another case of painting everyone with the same brush. To ban all fees will be a disaster, particularly when it comes to references. A justifiable fee should be charged to them as it gives a commitment by the tenant that they are not time wasters trying it on at the agent/landlords expense. The whole objection is focused on landlords/agents as if there isn’t such a thing as a bad tenant. A total ban will only lead to an increase in rent and the tenant will end up paying more in the long run.
The real answer is in the story, landlords should be shopping around to find the right agent for them and the tenant. Too many landlords are focused on themselves and blame the agent when it goes pear shaped.
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It isn’t rocket science to work out that banning tenant fees will only serve to increase rents. The increased costs to Landlords for compliance, along with recent increased tax burden, has created very tight margins for many. Let’s not forget that these Landlords are trying to secure their own future given the pension debacle this country finds itself in. Passing extra costs on to Landlords simply won’t wash.
More and more we here the likes Shelter and the CAB jumping on the ‘ban agents tenant’s fees’ bandwagon. Their arguments are poorly conceived and ill thought out. A recent example – a Tenant fails referencing because they have lied on their application form ; who pays for my abortive costs for mine and my staff’s time?…The Landlord?.. To cite another – Tenant pulling out a day before they were due to move in as they have applications in for more than property? …Should I have to swallow these costs? Put simply I cant afford to! Expecting no formal financial commitment from a Tenant applicant is not living in the real world and is totally unacceptable.
The real solution is a calculated cap on Tenant fees. To achieve that it means Shelter and the CAB must sit down with the government and regulatory bodies. Perhaps they are too busy ranting their ‘populist’ and ‘opportunistic’ views to have the time….
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just ban letting agent fees to tenants….let shelter and CAB have their way and let them see rents rise (with the tenant paying the increased cost EVERY single month)
Shelter lobbied for deposit compliance which has increased costs to tenants (but also made some companies like NLA and ARLA millions in the process). Sadly we have too many organisations with their noses in the trough, who should really be protecting the interests of letting agents and landlords).
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