Are you ‘letting’ agents take more than your deposit?
As rents rise and wages are squeezed, headlines abound over how the UK’s tenants are struggling. This is only half the story. Tenants may also be faced with other costs at the beginning, during and end of a tenancy.
And although fees might be the price tenants have to pay for a professional service from their letting agent, how confident can they be that this is what they will receive?
An article in today’s Metro paints a grim picture of how rising rents are affecting tenants across Britain:
- More than 10,000 tenants contacted the Consumer Credit Counselling Service in the last 12 months – a rise of 27% on the previous year.
- On average, tenants were £760 in arrears and regularly left with a disposable income of just £35 a month after paying all their bills.
This comes at a time when a growing number of people are relying on the private rented sector to provide a longer-term home.
Only part of the picture…
But the rent itself is not the only cost that tenants have to face in the private rented sector.
When I worked at the Resolution Foundation I conducted a mystery shopping exercise on 25 letting agents. This unearthed the costs that tenants were confronted with at the beginning, during and end of their tenancy. These costs varied significantly across the agents (administration fees ranged from between £90-400, for example) but also across locations.
In London, tenants faced upfront costs (including deposit, admin fees and rent in advance) of £2k, and some agents also charged fees to renew a tenancy or to check out of the property.
It gets worse – tenants may not always find out about these fees until quite late in their process of looking for a house to rent – only two agents had these fees listed on their website.
Price to pay for a professional service?
Letting agents can play an important role in ensuring that both landlord and tenant deliver and receive a professional service.
Sadly, this doesn’t always follow. At the sharp end this can result in both tenant and landlord losing significant sums of money when an agent acts negligently.
More broadly tenants report problems getting repairs carried out on time, difficulties getting hold of agents, or a lack of redress.
Part of the problem is that, unlike estate agents, letting agents are not required to sign up to a complaints scheme. Around 40% of letting agents aren’t signed up to a redress scheme and, according to the Property Ombudsman, a quarter of the complaints they received last year from consumers related to these particular letting agents.
So what can be done? You might remember from our previous Conversation that we’ve proposed a Private Members’ Bill that would deal with this problem. If it was to become law it would require private letting agents to join an approved complaints scheme.
We’re also conducting wider research to find out whether people know what rights they have in the private rented sector, and their general experiences of letting agents. So, treat this Conversation as a sounding board – what’s your experience, good or bad, with letting agents?
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