Business

Charity calls for end to letting fees for tenants

Monopoly pieces on coins Image copyright PA

All UK letting agency fees should be paid by landlords who can shop around, rather than tenants - as is the case in Scotland, Citizens Advice has said.

The charity said that renters in much of the UK faced rising fees as they had no choice over the agent they dealt with after finding a house or flat.

Landlords, on the other hand, were able to choose between agencies to act for them when renting out their property.

A landlords' trade body said better regulation was a greater priority.

Students facing charges

Citizens Advice said the number of people contacting the charity with questions and complaints about lettings agents was on the rise.

It received 6,500 calls about the sector in the year to the end of June, up from 6,200 the previous year, and 5,700 the year before that.

Calls from 17 to 24-year-olds were increasing particularly fast, it said.

Now, with university and college students starting in digs for the first time or returning to rented accommodation, the charity is braced for more calls.

It said that previous research had highlighted problems such as delays in getting basic repairs completed or in fixing properties that were so damp or cold they could pose a health risk.

In other cases, tenants sought help when they felt the fees they paid for administration were much more than the cost of renewing their tenancy agreement.

It said agents' fees had risen in recent years, from a typical level of £125 in 2009-10 to £200 in 2014-15. In some cases, the charity said, fees were as high as £700.

In Scotland, lettings agency fees to tenants are banned. Elsewhere in the UK, fees vary widely with costs in some big cities much higher. In England and Wales since last year, lettings and managing agents have been legally obliged to clearly publicise their fees.

'Costs are essential'

Yet, Citizens Advice said fees were charged for a range of services including preparing the tenancy agreement, checking references and credit checks, along with the possibility of a non-refundable holding deposit paid before signing a tenancy agreement.

The charity said there should be a single charge set by the agency for all its services, but paid solely by landlords who were in a better position to shop around and pick the best agency.

"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," said Gillian Guy, chief executive of Citizens Advice.

David Cox, managing director of Association of Residential Letting Agents, said: "Letting agent fees cover the cost of essential items during the lettings agreement 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 letting agents money to carry out, and in fact, provided the agent has a fair pricing structure, the agent will not make a noticeable profit on charging for these items. Landlords too, incur their own costs to the agent, for services such as advertising the property and arranging viewings, amongst others.

"Rather than simply transferring the total cost onto the side on the landlord, what is crucial is to provide consumer protection through better regulation of the private rented sector."


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