The Scottish government has ruled that letting agents and landlords shouldn’t charge upfront fees to tenants outside of their deposit. With rents rising and evidence of high fees, should the rest of the UK follow?
After a period of consultation, the Scottish government has confirmed that letting agents and landlords should not be charging tenants any upfront fees outside of the rent and refundable deposit.
This means that it will be illegal in Scotland to charge fees for things like referencing, credit checks or inventory fees. It has always been illegal to charge a premium on top of the rent in Scotland, but there has been confusion about what this meant, leaving agents to continue charging fees.
The Scottish government will make amendments to its renting laws by the end of November to address this problem.
Tenuous tenancy charges
Extra letting agent fees have long been a source of discontent for tenants. In a previous Conversation I highlighted the huge charges some tenants face, such as a £400 in administration fees. When you consider that this often largely involves editing and printing off an agreement, and that the agent may also be charging the landlord for this too, it’s no wonder that many tenants think such charges are a rip-off.
Also, while some agents allow tenants to move on to a rolling contract at the end of a tenancy, others charge another fee of up to £100 just to reprint a revised agreement. Is that really a reasonable and fair fee for tenants to pay?
What about landlords?
While the fees letting agents charge landlords are also a bone of contention – we saw this with the Office of Fair Trading’s investigation into the renewal fees charged by Foxtons – at least landlords have the power to choose who lets their property.
Landlords are buying a service and so they presumably have greater bargaining power in negotiating what they’ll pay. And arguably they should be the ones paying, rather than the tenant.
In contrast, with the vast majority of properties now let through an agent, and a lack of private-rented housing generally, tenants have no choice but to pay up and may end up paying such fees frequently. That’s because the average length of time someone stays in the same private-rented home is one year, compared to 12 years for someone who owns their home. And with many agents not displaying their fees clearly on websites or in adverts, shopping around can be a time-consuming task.
What do you think about letting agent fees? Are they fair or a rip-off? Should the rest of the country follow in Scotland’s footsteps?