Rip Off Letting Agents Prey on Tenants
Letting agents are ripping off tenants with high fees that are not revealed until they come to let a home, claims a new report.
Mystery shoppers found only two letting agents visited in London, Manchester and Gloucester advertised letting costs online and the range and cost of fees varied ‘significantly’ between firms.
The survey was carried out by the Resolution Foundation, an independent think tank.
The investigators found administrative fees ranged from £95 to £375. Total upfront costs, covering a deposit, administration fees and advance rent for a single bedroom home were £2,166 in London, £1,028 in Manchester and £1,094 in Gloucester.
Average deposits for the home were £487 in Manchester and £1,099 in London.
The foundation claims few low to middle income families can afford private rents – and for most, saving an average deposit at the rate 5% of their annual income would take more than 30 years.
The report supports Property Ombudsman Christopher Hamer’s call to regulate letting agents – a request falling on deaf ears in government.
Other recommendations in the report include forcing letting agents to sign up to the Property Ombudsman service for independent dispute arbitration.
Housing minister Grant Shapps has repeatedly stated the government has no intention of regulating the industry.
Vidhya Alakeson, research director for the Resolution Foundation, said: “The lack of regulation in the exploding private rented market is of growing concern. We need more transparency so tenants at least know what fees they’re facing and to help create a more competitive market.
“Given that an increasing number of families have no option other than to rent long term, we need to question why letting agents are not regulated to the same degree as estate agents.”
Unsurprisingly, the Property Ombudsman backs the call, as do the Association of Residential Agents (ARLA).
Comments
Have Your Say
Every day, landlords who want to influence policy and share real-world experience add their voice here. Your perspective helps keep the debate balanced.
Not a member yet? Join In Seconds
Login with
Previous Article
Airline Pilot’s Holiday Let Strategy Takes OffNext Article
Letting Agent Ripped Apart by Social Media
Member Since July 2013 - Comments: 561
12:18 PM, 13th December 2011, About 14 years ago
It is not just tenants that are getting unexpected large “admin” frees changed by letting agents; a lot accidental landlords are also getting ripped off, by high administrative fees for simple tests like extending a tenancy.
The administrative fees are well hidden from potential tenants and landlords, until after they have made a “mental decision” to go with a given agent and the contract is then just handed over to be read in 10 minutes and signed. (Often tenants are not even given the contract until the day they move in; likewise landlords don’t see it until after the agent has found a tenant.)
Some regulation of fees are needed requiring them to be listed in bold print in all adverts etc. – the loan industry was as bad until it was regulated.
Maybe there should be a limited set of admin changes an agent is allowed to make, and all agents having to provide a “fact sheet” in the same format that lists their charges.
I don’t know the solution, but if letting agents don’t come up with something them self’s, then the government may be force to impose something much worse
Member Since January 2011 - Comments: 12193 - Articles: 1395
12:23 PM, 13th December 2011, About 14 years ago
I like your thinking on this Ian, something along the lines of a one pager which lists all charges in a standard format would be very useful.
Member Since July 2013 - Comments: 561
12:33 PM, 13th December 2011, About 14 years ago
“I like your thinking on this Ian, something along the lines of a one pager which lists all charges in a standard format would be very useful.”
I think there need to be a requirement that this “one pager” is included on ALL on-line adverts, as well as full page newpaper adverts.
Member Since January 2011 - Comments: 12193 - Articles: 1395
12:36 PM, 13th December 2011, About 14 years ago
Well the Newspapers will love you for that commet Ian but I’m not so sure the landlords who pay for lineage adverts will be so fond of the idea. The costs could easily be required on internet adverts where space is not so much of an issue but I think it would be a good idea for every tenant to be handed the one pager or have it emailed to them at the point of enquiry.
Member Since July 2013 - Comments: 561
12:51 PM, 13th December 2011, About 14 years ago
That’s way I said “full page advert” so that an agent that advertises a lot of properties have to show all the charges, but a landlord with a single property does not. It could also be done on the number of properties a given chain of agents is advertising in the newspaper.
Member Since January 2011 - Comments: 12193 - Articles: 1395
12:58 PM, 13th December 2011, About 14 years ago
Oops! So you did. I obviously read it in haste and thought you meant lineage adverts.