Mumsnet community outraged by couple facing £150 tenant referencing fee

| Rosalind Renshaw

It may not be the most obvious forum to discuss agents, but you can certainly trust Mumsnet to open up some forthright debate.

Take this, from yesterday, concerning a couple being charged a non-refundable £150 fee for reference checking, despite being highly unlikely to get the tenancy.

The writer – mother of one of the tenants – said the practice is “fundamentally very immoral”.

We would be very interested in your views.

“I realise that agencies need to make money and in general I think they serve a purpose and are not rip-off artists, but…

“My daughter is looking at a flat to rent at the moment. It’s perfect for her and her partner, but has had a lot of interest.

“The agency has said that they are going to do referencing checks for everyone interested, at £150 per person, then present details of the people who pass to the landlord, who will select who he actually wants. The unlucky competitors won’t get any sort of refund.

“It won’t surprise any of you to hear we’re in SE London!

“I don’t think it’s a good idea for my daughter to do this, as she is disabled and her partner is on a low income, meaning they would get partial housing benefit.

“I don’t think there is any chance of them being chosen over professional couples with a decent income.

“I also think it’s fundamentally very immoral for the agency to be planning to make a couple of thousand pounds knowing that most of their clients will not be getting the flat…

“She really wants to try though as it would be perfect for them. Do you think there’s any chance of making a deal with the agency that if (when!) they don’t get the flat, the referencing can stay valid for e.g. 3 months so that they can look at other places with that issue out of the way?

“£300 is quite a chunk out of their limited savings if they don’t get the place- they have got a decent deposit and first month’s rent but it’s impossible to save any more significant amounts.”

That post quickly drew a mass of responses, mostly expressing outrage and disgust but some offering genuinely helpful advice.

An earlier post on Mumsnet complained about persistent touting letters being received by someone with a property on the market with their preferred agent.

“I don’t doubt that this [touting] is common practice, but it is really unpleasant … If we had wanted to use them, then we would have done so in the first place.”

The responses included one that suggested the unwilling recipient should name and shame the touting agents on Twitter.

Which she did.

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17 Comments

  1. Robert May
    October 13, 2015 at 07:26

    Just out of interest what mobile phone has she got?

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    1. porkpie
      October 13, 2015 at 09:02

      What’s that got to do with the price of fish?

      Even if the applicant was earning a good wage, £300 is an absolute con, especially when they are taking £150 per applicant whether or not they are successful.

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      1. PeeBee
        October 13, 2015 at 12:52

        I cannot speak for Robert, ‘porkpie’ – but I’m certain that his comment has chuff all to do with the price of fish* and everything to do with the mother’s claim that “…it’s impossible to save any more significant amounts.”

        Say they both have £50 per month smartphone contracts as seems to be the current minimum requirement for today’s gadget generation – there’s a hundred quid a month they could save.  Even if they ‘need’ phones, they can get pretty good contracts at £15 or so per month each – still save £70 a month.

        This has nothing to do with the mother’s claims and all to do with priorities.

        *The price of fish is, of course, a serious consideration in terms of priorities.  Using the analogy above, the £70 per month saving would buy this young couple enough fish to live on for a week.

        Alternatively, they could buy two rods – and live on fish forever…

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  2. Tw
    October 13, 2015 at 07:39

    Probably an IPhone 6+

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  3. Will
    October 13, 2015 at 07:41

    If they have no realistic prospects of passing a reference the agent should have some integrity tell them so and not take their money. The referencing fee is excessive and they should avoid this agent like the plague. Such agents give everyone a bad name. Even the applicant’s family realise the prospect of passing referencing is low so why are they bothering??

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  4. GlennAckroyd
    October 13, 2015 at 07:57

    Housing benefit or not, I do not agree with the principal of paying a referencing fee and not getting a house upon application.

    Agents can receive multiple applications and for a couple of quid, do a credit check – and from those, select the best candidate to put forward.

    So one person pays, and if their application stacks up, they get the house.

    Making it free for tenants to apply is better for the tenant, landlord AND the agent. Here’s why;

    Tenant – It’s free, so no rip off and they only pay an admin fee if they get the house on move in. Result = far more applications flood in.

    Landlord – More applications, more quickly. The void is reduced, earning them more rent, and they get to cherry pick from a bigger pool, so they get better tenants

    Agent – Happy landlords and tenants. Good quality tenants stay longer. Our average tenancy length has just exceeded 5 years. The lifetime value of a management contract makes it very commercially appealing and you avoid the churn of unhappy landlords.

    We’ve had no tenant find fees for 2 years and it was one of the best moves we’ve made.

    And please keep the debate away from what housing benefit tenants spend their money on. Generalisations like this give the industry a bad name. I come from a family where we had to rely on housing benefits at one time.

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    1. Beano
      October 13, 2015 at 09:39

      Really?, wow your people have a lot of time on their hands. Processing applications takes up a lot of man hours. I will only take one application fee, but it will be from the applicant(s) that come to me with the best credentials, and crucially, (something industry newcomers won’t quite have) have got past my inbuilt radar. If I have two or three that pass on both counts then either the rent is too low or I am spending too much on marketing!

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    2. ray comer
      October 13, 2015 at 09:47

      so who pays for the man hours used up in carrying out all the extra viewings, reference checks, credit checks etc that comes with offering a free service? you?

      I worked with an agent many years ago and spent hours trying to talk him out of trying this approach; it increased his monthly referencing costs by over 600% over 3 months and made zero difference to the number of houses he let. The only way to increase the number of lets was to reduce the acceptance criteria which just led to bigger headaches further down the road; rent arrears, evictions, tenant damage etc

       

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      1. GlennAckroyd
        October 14, 2015 at 09:23

        For us there is no extra man hours. We do open viewings and get many people in attendance. From there, they apply by phone or online. No paper apps.

        We have a direct feed to our credit agency and it automatically scores. Our computer systems does affordability and criteria checks automatically.

        Those with green lights are reviewed by the local agent/landlord to decide which one to put forward.

        The ‘hard work’ is done by the system and the final selection based upon the agents own feel for the person they’ve met.

        And beyond that, once we’ve approved them in principle, we visit the tenant in their current home.

        Yes, we’re doing the ‘hard work’ here, but it makes the letting easy.

        We get a far better quality tenant and we lower the risk. Hence our score with long term lets.

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  5. MF
    October 13, 2015 at 08:08

    Outrageous practice.  What’s the point employing an agent if all the agent does is charge (rip-off, in the circumstances) fees to collate multiple applications / process referencing, and then bung these pieces of paper over to the landlord to make the final decision.

    There is far more to the vetting process than the referencing enquiries, and that’s the agent’s job to do.

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  6. smile please
    October 13, 2015 at 08:49

    Seems bad practice to me.

    Why not reference first interested party and if they fails onto the next, 48 hour turn around landlord should be okay.

    This is just ripping off tenants.

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    1. Beano
      October 13, 2015 at 09:40

      Exactly, name and shame the agent and this rip off practise.

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  7. ray comer
    October 13, 2015 at 09:40

    That is a shocking way to treat people, its no wonder the industry gets bad press when practises like this get highlighted.

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  8. PeeBee
    October 13, 2015 at 11:05

    Just a reminder, before a lynch mob is sent off to track down this heinous Agent, that what is being reported is an aggrieved Mother’s interpretation of the situation.

    Maybe – just maybe – the Agent’s interpretation would read slightly differently…

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  9. Traditionalist
    October 13, 2015 at 12:53

    Having rented some time back, I too faced this somewhat questionable practice.  I might add that it was a very well known high end agent (ARLA NAEA etc etc).  They said that there were 15 (yes 15) other people interested in the house and the owner wanted referencing done on all of them and then he would make his decision as to who would be successful.  The charge was £200 plus VAT.  £3000 plus VAT just for referencing.  Not bad eh.  Does this sound at all reasonable to anyone?  I have to admit I had never come across this before with my fellow agents in London, so it would be interesting to know who the SE London agent is and who else is now doing this.  Keen to get the house (in the country) and assuming the person I was dealing with was a complete novice (if not a shyster) , I decided the best thing to do would be to visit the owner and discuss the agent’s comments. We agreed the letting there and then.  The agent got their fee but not the extra referencing fees they had hoped to acquire.  However the agent tried very hard to scupper the deal.  Our agency (like the majority I would think) undertake viewings, put forward offers, the Landlord decides who he/she would like to proceed with and we take a non refundable deposit of one week’s rent and the admin fee to take the property off the market while referencing is carried out.  Simple, straightforward and understood by most people looking to rent a property.

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  10. Woodentop
    October 13, 2015 at 22:35

    We only charge one family at a time for referencing, not multiple = very poor practice, more to do with the agent making profit? However we do charge £70, cheap as chips compared to our competitors but we cover our costs (same costs no matter where you are in the UK if using national reference agencies!). Will always charge a  tenant, it helps weed out the bad ones who lie and don’t want to loose the money being found out.

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  11. livingproperty
    October 13, 2015 at 23:36

    I’m sure it’s not right to reference numerous tenants at once for one property – that’s just wrong on all levels… I’m sure their redress scheme would have something to say about that!

    Something smells VERY fishy! If I were half of that couple, I’d run a mile!

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