'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
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Project Assistant

£17000 per annum: Recruitment Genius: They are a leading company in the field ...

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Office Manager

£26041 - £34876 per annum: Recruitment Genius: There has never been a more exc...

Recruitment Genius: Travel Customer Service and Experience Manager

£14000 - £17000 per annum: Recruitment Genius: The fastest growing travel comp...

Day In a Page

Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen
RuPaul interview: The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head

RuPaul interview

The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head
Secrets of comedy couples: What's it like when both you and your partner are stand-ups?

Secrets of comedy couples

What's it like when both you and your partner are stand-ups?
Satya Nadella: As Windows 10 is launched can he return Microsoft to its former glory?

Satya Nadella: The man to clean up for Windows?

While Microsoft's founders spend their billions, the once-invincible tech company's new boss is trying to save it
The best swimwear for men: From trunks to shorts, make a splash this summer

The best swimwear for men

From trunks to shorts, make a splash this summer
Mark Hix recipes: Our chef tries his hand at a spot of summer foraging

Mark Hix goes summer foraging

 A dinner party doesn't have to mean a trip to the supermarket
Ashes 2015: With an audacious flourish, home hero Ian Bell ends all debate

With an audacious flourish, the home hero ends all debate

Ian Bell advances to Trent Bridge next week almost as undroppable as Alastair Cook and Joe Root, a cornerstone of England's new thinking, says Kevin Garside
Aaron Ramsey interview: Wales midfielder determined to be centre of attention for Arsenal this season

Aaron Ramsey interview

Wales midfielder determined to be centre of attention for Arsenal this season
Community Shield: Arsene Wenger needs to strike first blow in rivalry with Jose Mourinho

Community Shield gives Wenger chance to strike first blow in rivalry with Mourinho

As long as the Arsenal manager's run of games without a win over his Chelsea counterpart continues it will continue to dominate the narrative around the two men
The unlikely rise of AFC Bournemouth - and what it says about English life

Unlikely rise of AFC Bournemouth

Bournemouth’s elevation to football’s top tier is one of the most improbable of recent times. But it’s illustrative of deeper and wider changes in English life
A Very British Coup, part two: New novel in pipeline as Jeremy Corbyn's rise inspires sequel

A Very British Coup, part two

New novel in pipeline as Jeremy Corbyn's rise inspires sequel
Philae lander data show comets could have brought 'building blocks of life' to Earth

Philae lander data show comets could have brought 'building blocks of life' to Earth

Icy dust layer holds organic compounds similar to those found in living organisms