Are letting agents breaking the law on fees?

by , Principal Policy Adviser Consumer Rights 5 March 2013
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We’ve just mystery shopped letting agents and found that many aren’t being upfront about their fees. We think they’re breaking the law – so how are they getting away with it?

A picture of a house on a chalkboard

Buying a property remains out of reach for many, so renting has become a fact of life for millions of people. In fact, rental properties currently provide homes to more than 4.7m people in the UK.

When we investigated letting agents last year, we identified upfront fees as one of the biggest concerns for renters. So we’ve undertaken a mystery shop of four branches each of four different agents in London – Foxtons, Barnard Marcus, Martin & Co and Your Move – to see if they were upfront about the fees tenants could expect to face.

Letting fees are clear as mud

Our snapshot research at these letting agents revealed some worrying results. For a start, none of them provided information about fees in any property listings on their sites, on or after tenants had registered online.

Out of all the branches, only one agent at one Foxtons branch proactively gave fee information to a customer who registered at their branch or called to arrange a viewing. On top of that – not one of our mystery shoppers was provided with a written list of charges.

But even more worryingly – in some cases, our shoppers were either not given fee information when they asked for it, or were not given the correct or complete details.

So how can potential tenants hope to shop around for a letting agent when it’s made so difficult to compare fees? Ultimately, tenants could be vulnerable in this situation – particularly in competitive rental markets like London’s. After all, once you’ve found a property you want, you’re unlikely to let it go, even if it means paying-up for expensive fees.

Unfair and unlawful

As far as we’re concerned, the lack of transparency with letting agents’ fees is not just bad practice – it’s unlawful. We believe that the current failure of letting agents to show fees upfront is a breach of Consumer Protection Regulations, because they are not providing material information in a manner that is clear and timely.

So we’ve written to the four agents listed above to share our findings, demand improvements, and remind them of their legal responsibilities. We want to see increased transparency and an end to hidden fees as we think tenants deserve much better.

Have you had any bad experiences with letting agents? Was your agent upfront about its fees, or did you find yourself facing a hefty bill when you came to sign the contract?


Add your comments



I’ve just decided to move to another property for health reasons so won’t be renewing the lease on this previous agents have just advised they will not provide referencing to new landlords unless I pay a shocked at this having just paid hundreds in fees for referencing to the new property agents.any advice please?



According to the law, for how long does a landlord have to pay the standard letting fee (not management fee) to an agent if the tenancy agreement lasts 3 year or more , with the same tenant living in the property ?
- I understand that for year 1, landlord pays agent full letting fee.
But then what happens :
-Year 2 : is it against the law for agent to not reduce the letting fee charged to landlord ?
- Year 3 and onwards : is it against the law for agent to charge any letting fee to the landlord ? Should landlord still be paying anything ?

Thanks !

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