/ Home & Energy

Are you ‘letting’ agents take more than your deposit?

Piggy bank on wall outside house

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?

Comments
Profile photo of dean
Member

I have had many bad experiences with lettings agents, too many to list, but now I am no longer renting so the fees just go to solicitors/loan companies instead.

I think it may be worth highlighting how letting agents screw their landlords for fees also. It’s taken me 5 months to get my property up north let out again and what with the extra “renovation” costs that just keep escalating, the letting “fee” is £235 and a marketing “fee” of £70. Then you have to pay for them to draw up to contracts, the same as they charge the tenant.

For landlords it didn’t used to matter as you property was appreciating. Nowadays the amount of fees mean that you are almost losing money. Hence the reason why I think in general, rents have gone up in recent years.

Profile photo of tpoots
Member

I recently moved into a new flat and, as expected, I was hit with quite a large upfront cost to be made prior to moving in to the property.

The letting agent for the property only presented us with the administration costs for letting as soon as we expressed an interest in putting down a holding deposit, in order to secure the property. These costs included an administration fee of £85+VAT per person and £70+VAT to draw up a copy & pasted tenancy agreement from the previous tenants who had occupied the flat. I will also be one of the unfortunate tenants who has to pay to ‘check out’ at when I leave.

We were actually offered 50% off the administration fee following some complications with the move, after the agent admitting that they make profit on these anyway.

Profile photo of tbwtg
Member

Letting agents don’t seem to be much good at looking after properties either. Letting one older flat in Scotland, we as registered landlords get hit for agents’ marketing fees, then administration fees while the tenancy is going on, and have the property “inspected” “regularly”, but I’ve been present accidentally when one of these was going on, and heard about others from previous tenants. Perfunctory wouldn’t be the word for it (though the quick glance in each room probably confirmed there wasn’t a cannabis farm in situ). If the tenants underpay some months, who has to flag this up when we receive the agents’ statement, then wait for the agents to collect the shortfall they’d never noticed? The landlords. The tenants fail to keep the front garden tidy though it’s a responsibility in their lease, the factors for the building complain to us, but months go by with nothing getting done by the letting agent except more “inspections”, until after the tenants leave. After the tenants move out and we find water damage from unattended leaks, kitchen damage from broken doors etc, who has to get this fixed? The landlords. The agents are members of ARLA (a trade association) with quoted standards, but a joint complaint by previous tenants and landlord about a mistimed maintenance visit and invoice, got nowhere, the agents just took the money from the tenants deposit when they moved.

The Scottish Government is now, as part of deposit protection legislation, forcing letting agents to provide evidence of damage etc and, surprise surprise, the agents are now paying more attention to getting evidence of the initial state of the property, eg digital photos. They’re increasing their admin charges slightly to cover this…

Making agents be part of a regulated complaints procedure (rental services ombudsman?) sounds like a good start.

Member

my letting agent are terrible too. they are incompetant, they lie and make up the most unbelievable stories, they break the law and think it doesnt apply to them and yes they screw EVERYBODY for as many ridiculous charges as they can. they did a whole heap of disgusting things to me and they do not treat tenants or landlords well.
why on earth are these people not properly regulated?
all the good landlords that treat tennants nicely have their properties tied up with (hogged by) agents, inflating the rents and meaning fewer private troublefree lets and everyone loses money because of this, except one party.. guess who!
i now want a private landlord or housing association property, i cant be dealing with those rats anymore.

Member
Anisha says:
17 October 2012

my letting agents disgusting and very greedy.they are liar.they cheated me from the very beginning and try to treat me unfairly every now and then even though i’m a very good tenant and pay my rent on time.Few occasions they threatened me and served me two invalid section 21 notices when i did not agree with their unjustified rent increase and fees.they serve me notice on wrong date and via email and try to enforce that on me.I have direpair issues with as well.Now i’m thinking about to take legal actions against them.Me to simply don’t get it why this ridiculous, disgusting institutions are not regularized dare to harass people unlawfully.

Member
Alison says:
23 October 2012

My letting agents are greedy, rude disgusting people! When I complained about repairs (damp), they threatened me with eviction! I complained again because having asthma & a daughter that suffers from asthma also, I knew the damp was an issue. The agent then waited until I had a newborn baby (5 days old), then evicted me! So rather than get repairs done & keep a really good tennant who has been in the rpoerty for 3 years & never missed a rent payment etc, they decide to evict me & my children! The whole way the agent conducts themselves is wrong. speaking to me like I am beneath them just because I am a single parent. The should be some sort of law against agents/landlords so that good tennants are protected!

Profile photo of Jennifer Davis
Member

I’m afraid I’ve had nothing but bad experiences with lettings agents.

Most recently, I moved into a house in Kent using one of the main letting agents on the market. We expected some fees for credit checks and the like, but we were very surprised to find that we had to pay nearly £400 just for credit checks. On top of this, they wanted a £160 holding payment before we paid our deposit (which was 6 weeks rent). The reference checks took no time at all, and I certainly can’t imagine how it cost the letting agent nearly £400 to make them.

Since we’ve been living in the property, the agents have been next to useless. Within our first week, we submitted a list to them of problems we’d had with the property. Yet 4 weeks later, they hadn’t got back to us, and every time we tried to contact them – they told us our landlords were ‘uncontactable’ and that they didn’t have phones or emails where they’d moved to.

It turns out that that wasn’t true (as suspected) – the landlords rang me directly to discuss a few matters (as we were both so fed up of not being able to communicate through the agent). They confirmed that they’d been easy to contact and both had mobile phones, and that they replied to any communications sent to them. They simply hadn’t been sent any! Quite rightly they were furious – they’re paying their agents over £120 a month but they’re not sure what for.

Member
Kate Beaumont says:
26 October 2012

We are in the process of trying to rent a property as the one we are currently in has been put on the market and we have to move out. We found a property that we liked but have been staggered to find that we are expected to pay an admin fee of £590 plus VAT! This is before a deposit of £2800 and the first month’s rent of £1800!
I cannot see how ‘admin costs’ can amount to £590 – seems appalling. I am refusing to pay out this amount of money but have been told that they won’t take the house of the rental market until we do so. So – I’m now looking for another property – unbelievable.

Member
Mrs h tuck says:
17 May 2013

Found a property to rent with a well known estate agent,payed all the Admin fees around £400-500.
Then payed a deposit of £800 to the landlord owning the property. But to my horror the landlord was in repossession of property to the bank. We were told we could be evicted . As bailiffs came round to repossess the property. We rang the estate agents straight away to let the know the situation but was told it wasn’t there responsibilty and there was nothing they could do, even though the landlord was one of their clients. So now we won’t even get our deposit. ,, uh.

Member
Christine says:
23 September 2014

I have been living in a rented property for over 3 years. I have now (out of the blue) been served notice to vacate as apparently the landlord wants to move back in. The letting agents have given me a long list of things that need to be thoroughly cleaned and steam cleaned. Some of which I’ve never even looked at yet alone used. They have also tbreatened to charge me £5 for every lightbulb that doesn’t work (the one in the external light over the door has never worked). I have also been told that I have to pay £60 cash checkout fee. Surely if I am being evicted I don’t have to pay a checkout fee? Also, during the tenancy, neither the landlord or the letting agents have done anything to resolve repair issues I’ve raised. Can they do this? I have no money to move home. No deposit and no money for paying rent I advance so it’s proving a challenge sorting this mess out. Also it was a furnished proorrty so I have all that to find too. I wrote to the letting agent to challenge the checkout fee and to complain about the manner in which this has all been handled, only to be ignored

Profile photo of Patrick Steen
Member

Hello Christine, I’m sorry to hear that. We have a guide for landlords on evictions, which will be helpful for you to see what they can do: http://www.which.co.uk/consumer-rights/action/how-to-legally-evict-your-tenant

This guide form the governmernt could also help: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/320055/How_to_Rent-_The_Checklist_for_Renting_in_England_FINAL_V4_Links.pdf

If you’re a Which? member, you can contact our Which? Legal service who may be able to help: http://legalservice.which.co.uk/

Good luck

Profile photo of LorraineORegan
Member

Hi, both us and our daughter have been renting the same property through an estate agent since 28th March 2013 both us and our daughter are on the tenancy agreement as she was over 18. She has now decided to move in with her Boyfriend and has paid a deposit on a flat through the same agent. We have now found out that we have to pay £120 each for checks to be made to see if we can afford the rent on our own. What happens if we can’t? also if we can does that mean that we will have a new tenancy agreement and a new start date? I recently asked if the payment day could be changed to the begging of the month as opposed to the 28th, as my pay day had changed to the last Friday of each month which means that on many occasions the rent is due before I get paid. I was told No, as the contract started on the 28th of the month it will have to remain like that. However, today I have received an email saying that “I an writing regarding your rental payments which we currently take from your account by direct debit,(For the last 2.5years) but we are stopping this method of payment with immediate effect as this is causing a delay in payment to Landlord. Could you please contact your bank to cancel the direct debit and set up a standing order for future payments. Your rent is due by 28th of the month so ideally funds should be taken from your account two days prior to this on order for us to receive funds on the due date” – WHY is it ok for them to request the money 2 days before it is due, but when we asked for it to be moved and obviously pay the difference between the 28th and the 1st they said no as it is written in the contract. Please can you advise if they can do any of the above. Many thanks Lorraine