'Out of control' letting agent fees are forcing tenants to go without food, says Shelter

Housing charity discovers agencies were charging renters more than £350 on average to set up a tenancy, on top of deposits and up-front rent

Housing charity Shelter has launched a campaign to end letting agency fees which are costing renters hundreds of pounds.

Shelter carried out mystery shopping research with 58 letting agencies across the country and found that all of them charged fees to renters to set up a tenancy, as well as deposits and rent in advance.

Average fees charged were almost £350, but almost a third of agencies charged renters more than £400 to set up a tenancy, and a further seven more than £700. These charges are in spite of the fact that letting agencies typically receive separate fees from landlords to set up a new tenancy on their behalf.

In some of the letting agencies investigated by Shelter, fees charged to renters – sometimes hundreds of pounds - were not refunded even when, through no fault of their own, the deal didn’t go ahead.

Shelter is calling on politicians to end letting agency fees charged to renters to set up a tenancy, including ‘administration’ fees, ‘holding’ fees, credit check fees and ‘check-in’ fees.

Franco Cirillo, Director of Dorrington Residential, one of London’s largest residential landlords and which is backing Shelter’s campaign, said: "It isn’t right that prospective tenants are asked to pay hundreds of pounds in fees, as well as deposit and rent in advance, for a service that landlords commission. We only work with letting agencies who agree not to charge renters any fees at all. It means that we can focus on the rent, and clear up any confusion about who letting agencies are actually working for."

Campbell Robb, Shelter’s Chief Executive said: "This shocking research reveals that letting agency fees are out of control. Anyone who’s tried to find a rented home in the past few years knows that affordable, decent places to live are in short supply, and often snapped up within hours. The high demand for rented homes means that renters can’t shop around, but instead have to deal with the letting agency their landlord has chosen. They have no choice but to swallow their anger and stump up their cash.

"People often forget that the landlord is the real customer of a letting agency, but the fact that renters also pay fees leaves both expecting the agency to act in their interests. This adds up to a confusing situation that leaves landlords in the dark and renters powerless.

"The only way to fix our broken lettings market is for the Government to stop renters being charged for the costs of setting up a tenancy. This would put landlords in a stronger position to negotiate the best deals, restoring healthy competition to the market and releasing renters from the burden of paying out hundreds of pounds in sky-high fees."

Caroline Kenny, Executive at the UK Association of Letting Agents (UKALA) comments: "We are completely against overcharging. UKALA members operate under a strict code of conduct that helps ensure communication, transparency and fairness underpins all dealings, financial or otherwise, between landlords, letting agents and tenants. Unfortunately however, there are unscrupulous agents operating within the industry who are overcharging tenants and damaging the industry with their dishonest practices.

"UKALA believes that agents should ensure that any fees and charges are made clear in advance of entering into any business relationship. Crucially, so long as information about potential costs is provided in an accessible, transparent and understandable manner, consumers can decide on where to place their business based on all the relevant information.

"Matching prospective tenants with suitable properties is resource intensive and can be extremely costly. The bulk of any agency's costs are covered by the fee paid by their landlord client. However, it is not always appropriate for the landlord to meet pre-tenancy costs, particularly when they are associated with proving the suitability of an applicant. It is therefore appropriate for a prospective tenant to contribute towards the administration and referencing process before a tenancy begins. This demonstrates commitment to the prospective tenancy, safeguards against an applicant securing multiple properties simultaneously, to then reject all but one at the last minute, and protects agents and landlords from applicants who provide false information.

"Tenants ultimately benefit from these processes being carried out professionally. Proper process, such as the inventory check-in and check-out, helps to protect the tenant."

Discover more property articles at Homes and Property
Sport
footballHe started just four months ago
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Sink the Pink's 2013 New Year's Eve party
musicFour of Britain's top DJs give their verdict on how to party into 2015
PROMOTED VIDEO
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Ashdown Group: Senior Marketing Executive- City of London, Old Street

£40000 - £43000 per annum + benefits: Ashdown Group: Senior Marketing Executiv...

Ashdown Group: Marketing Manager

£40000 - £43000 per annum + benefits: Ashdown Group: An international organisa...

Ashdown Group: Internal Recruiter -Rugby, Warwickshire

£25000 - £30000 per annum: Ashdown Group: Internal Recruiter -Rugby, Warwicksh...

Day In a Page

Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect