Citizens Advice: ban rip-off letting agency fees

[Michael Browne]

Letting agents’ fees should be banned to protect tenants in the private rental sector, a new Citizens Advice report has urged.

 

New evidence uncovered by the charity reveals tenants are frequently ripped-off by fees often hidden by letting agents – to the tune of £337 on average.

 

These charges come on top of advertised rent prices and deposits and in some cases can force people into debt, the charity says.

 

The Still Let Down report says letting agents have refused to adopt measures that were supposed to bring transparency and competition to the market.

 

Most agents charge for checking references, but costs range from as little as £6 to £300, according to the study. Renters can also be hit by charges ranging from between £15 to £300 for simply renewing their tenancies. Some agents charged £300 for credit checks that are widely available for £25.

 

Even when moving out of a property, almost half of the 353 agencies polled by Citizens Advice said they charge an average ‘check out’ fee of £76.

 

http://www.citizensadvice.org.uk/index/pressoffice/press_index/press_20150327.htm

 

Citizens Advice wants to gather evidence of bad letting agent's adverts such as the advert didn't include details of the fees, how much fees would be or being asked to pay fees not listed in the advert.

 

You can report it here:

https://citizensadvice1.wufoo.eu/forms/bad-letting-agent-ad-report-it/

[Steve__M]

Is one allowed to say that banning letting agents' fees is in the Labour manifesto?

 

I'm not a Labour member. I've been on record here many times saying they are a disgrace and represent a failure of market forces (because landlords who choose the agents have no influence or interest in what the agents charge their tenants).

 

Currently my partner's brother and one of our good friends are separately refusing to pay tenancy renewal fees each of which is more than £100.

[Andyorch]

" Is one allowed to say that banning letting agents' fees is in the Labour manifesto? "

 

Yes you are and yes it is:wink:

 

Andy

[stifle]

This is good-intentioned but ultimately pointless.

 

After an ASA ruling that upfront tenancy fees need to be disclosed in advertising, the agencies did so. Banning the fees won't make them go "oh dear, looks like our licence to print money has expired"; they'll just charge the landlord instead who will incorporate the fees in the rent.

[Kentish Lass]

This is good-intentioned but ultimately pointless.

 

After an ASA ruling that upfront tenancy fees need to be disclosed in advertising, the agencies did so. Banning the fees won't make them go "oh dear, looks like our licence to print money has expired"; they'll just charge the landlord instead who will incorporate the fees in the rent.

 

 

I realise this will be seen as unusual, but as a Landlord I also believe that Tenants should only have to pay minimum agent's fees (e.g. referencing, check in) because the Landlord already pays the agents!!! The normal Landlord payment to the letting agent for a new letting is (at least) a month's rent - this should be quite enough to cover their costs and give a profit.

[IanB3]

Letting agents are the agents of the landlord. As such, they are supposed to act in the interests of the landlord. They get paid by the landlord for that service. Accordingly, they should not take fees from the tenants - unless the landlord expressly agrees to them doing so. I believe the legal position to be that agents must account to the landlord for any fees that they take from the tenants unless the landlord has agreed that they may keep them- ie the letting agent must give those fees over to the landlord.

[mariner51]

If we consider LA's to be an auction house, the seller (LL) pays sellers Commission of around 15% on hammer price (for admiin & advertising etc) and buyer (T) pays a similar buyers Premium on purchase, so auction house is paid by both sides.

These days LA's quote Ts a combined moving in cost for deposit (if reqd), first month rent, admin. It is up to T to accept or decline.

LLs can refuse to engage LA's whose up front T fees are too high. If LA's want to stay in business their LL & T fees should be competitive. IMO prescriptive legislation is not the way forward.

[Steve__M]

The landlord gets to choose the agent and often goes for the one with the poshest office and glossiest brochures.

 

The agent rarely discloses the tenant's fees to the landlord, even if the landlord cared.

 

The size of the fee reduces the incentive of the agent to keep a tenant in the property at the end of a term as a new tenant means more fees.

 

Fees are not required to be described on Rightmove/Zoopla, and even on own websites it often says "other fees may apply" - e.g. my B-in-law's agent is currently charging him a hefty "renewal fee" - his agent is quoting an eye-watering "+ £425 (inc. VAT) admin fee. Other terms & fees may apply." for new tenancies on a 1-bed flat (in Devon)

 

Tenants often have only a small amount of choice when it comes to finding a new place to live, and letting agents are therefore in a strong negotiating position.

 

It would be much more sensible if such fees *were* folded into the rent as the rent is what tenants are interested in (in reality, the landlords will put downward pressure on what the agents charge, and they will have to cut down on the number of times they buy new BMWs).

 

Regardless, I hope anyone who has recently had to pay excessive agency fees will hopefully be aware that one of the parties is offering to get rid of them.