17:00 PM, 8th December 2011, About 12 years ago 6
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).