Shelter slams letting agent fees across England

Fresh from its success in Scotland, where it has won its campaign to get all tenancy fees charged by both landlords and letting agents comprehensively outlawed, Shelter has turned its sights on all lettings agents in England. The charity is now gathering evidence from both landlords and tenants.

Horror stories in the last few days from Scotland suggest that the fall-out has been spectacular, with some agents saying that they are being physically intimidated by tenants demanding their money back, staff resigning and more agency closures.

One agent described the market as having turned overnight, after the Scottish housing minister announced tightening up the law.

In Scotland, premiums were already illegal but the legislation did not make it clear whether admin fees were also illegal. New wording will be put in place shortly, making it explicitly illegal for any and all tenants to be charged anything by landlords and agents beyond rent and deposits.

Now, Shelter has announced the results of a You Gov survey into letting agents’ fees, which found that 23% – equivalent to 11m people – felt they had been ripped off by letting agents in England.  

The fee that most people said they had been unfairly charged for was for ‘administration’ (14% of people affected), followed by fees charged for credit checks (10%) and renewal fees (8%).
 
The latest survey, said Shelter, forms part of its investigation into ‘the unfair fees charged by letting agents’, suggesting it is not going to let up on its efforts.
 
It said that shocking cases it had uncovered included tenants being charged £150 for repeat annual credit checks, which cost the agent between £8 and £25; tenants being charged £100 per viewing and up to £540 in non-refundable admin fees; and agents double-charging fees for the same service to landlords and tenants.    

Over half (52%) who said they have been unfairly charged by a letting agent felt the fees were unfair because they were out of proportion to the cost or amount of work done.
 
Kay Boycott, director of campaigns, policy and communications at Shelter, said: “It’s scandalous that some letting agents are creaming off huge profits from the boom in private renting by charging both tenants and landlords fees that are totally out of proportion to the service they provide.
 
“With our investigation uncovering unexplained charges of over £500, we need to make sure that letting agent fees are reasonable. With costs like these, on top of the sky-high rents that families already face, it’s no surprise that many dread the day they have to look for a new place to rent.”
 
Shelter is calling on tenants  and landlords to share their experiences online to join the fight against unfair fees.

One tenant, Angelique Atkinson, a renter from Hampshire, paid £540 in administration costs when she rented a home with her partner. She said: “We didn’t receive any justification for these extortionate fees, and ended up having to pay nearly £3,000 upfront, making a huge dent in our finances. I have nowhere I can complain to and be taken seriously. We can’t afford to buy our own home; renting is so expensive that it seems impossible to save for a deposit. The rental market is a horrible place right now.”

Abdul Motin, a landlord from London, said: “A letting agent who was supposed to be renting out my home has ripped me off for £9,000, and we’re now struggling to meet the mortgage. The letting agents falsified the tenants’ references, withheld the rent and deposit from me, and have now dissolved their company. This is the only property I own and I’ll never rent it out again. This has been a living nightmare for me and my family.”

Jane Ingram, president of ARLA, said of the latest stage in the Shelter campaign: “Standards in the lettings industry do need to be raised; that’s why we have long-called on the Government to act swiftly and introduce a robust licensing system designed to protect consumers.

“ARLA has already taken steps to help inform and protect consumers by setting up our own member licensing system to guard against bad practice, and all of our members are required to be clear and transparent with tenants on any charges that they will incur.

“It is important to bear in mind that a professional lettings service cannot be provided to either a landlord or a tenant for no cost. However, both parties should be aware of their costs and feel that they have had a professional service, and should have somewhere to seek redress if they feel otherwise.

“We want our members’ clients to have a rewarding experience in the private rented sector, and that is why we set the standards and requirements of members that we do.”

Shelter – a beneficiary of the Estate Agency Foundation, which raises money for it and other homeless charities – is now calling on tenants and landlords to register online to join its fight against lettings agents’ fees.

www.shelter.org.uk/lettingagents

See also the next story, as Martin & Co fires a shot over Shelter’s bows.