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All letting fees should be covered by landlords, says charity

All letting agency fees should be paid by landlords, rather than tenants, as is the case in Scotland, according to Citizens Advice.

The charity argues that landlords have the advantage of being able to shop around for the best deals, while tenants have no choice over the agent they deal with, or the fees that they are charged, after finding a suitable home.

Citizens Advice said that an increasing number of people, particularly renters, are contacting the charity with questions and complaints about letting agents,


It received 6,500 calls about the sector in the year to the end of June, up from 6,200 in the corresponding month last year, and 5,700 the year before that.

Previously, many tenants had complained about delays in getting basic repairs completed or in fixing properties that were so damp or cold, but increasingly they now relate to agents’ fees, which Citizens Advice report have risen to as high as £700.

At the moment, tenant fees are charged for a range of services including preparing the tenancy agreement, checking references and credit checks, but the charity believes that these services should be paid for by landlords.

Gillian Guy, chief executive of Citizens Advice, said: “Private renters shop around for properties, not for letting agents. Landlords are better able to choose agencies based on performance and cost and it should therefore be landlords paying letting agent fees, not tenants picking up these rising costs.” 

David Cox, managing director of Association of Residential Letting Agents (ARLA), insisted that lettings agent have “a fair pricing structure” and do “not make a noticeable profit” on charging for essential items during the lettings agreement process such as credit searches, right to rent checks, the drafting of the tenancy agreement, inventories and the management of tenancy extension or renewal.

He also pointed out that landlords already incur their own costs to the agent, “for services such as advertising the property and arranging viewings, amongst others”.

“Rather than simply transferring the total cost onto the side on the landlord, what is crucial is to provide consumer protection through better regulation of the private rented sector,” he added. 

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  • icon

    Couldn't agree more. I have NEVER charged any of my tenants any of these "fees" that letting agencies seem to conjure up out of the ether.
    No other business passes these costs on directly to their customers - it's a cost of doing business, can be claimed against tax and shouldn't be passed on directly to the tenant. It only makes the lettings industry look more charlatan.
    Can you imagine to furore if a trade suppliers said to you "you want to do business with us, then it will cost £400 for a contract to be drawn up (which is the same as all our other customers, just with their name tippexed out and yours written in), then I need to charge you £80 to take a photocopy of your ID and another £100 to take a reference" - they wouldn't stay in business very long.

    jeremy clarke

    I just spoke to a solicitor as I'm looking to sell a little flat - a list of charges and other costs as long as my arm! What choice do I have, the fact is that if we want something we have to pay for it.
    If government stopped loading the work that agents had to do the charges might be less. I agree that some take the p*** but there is room for a reasonable charge to be levied for the work involved and believe me it isn't just a matter of tippex on an agreement. When dealing with several hundred properties management software is an essential tool to ensure nothing gets missed - factor that it at £5,000+/- along with office rent etc and you start to see the costs that need to be covered.
    As a tenant I was once asked by a landlord to meet in a pub to sign papers and hand over money!! Suffice to say i steered a wide berth and was happy to go to an established letting agents office in town and pay for the privilege.

  • cantseethewood forthetrees

    Any business which doesn't pass on their costs to their customers one way or another won't stay in business very long. So if tenants no longer have to pay initial tenancy set-up costs themselves the logical thing will be to increase the rent charged to cover them... the unintented consequence is tenant pays more. Say initial costs for a 12m contract were £450 - that's £37.50 a month but probably rounded up to £40 pm for the inconvenience caused. A tenant who stays 12m would pay £30 extra, 18m = £270 extra, 2 years = £510, 2.5years = £750 .... and this doesn't include the impact of any RPI/CPI increases on each year. Doesn't sound like much of a good deal for the tenant to me but good business landlord esp. if the tenant stays put for a LONG time!

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    • 31 October 2017 07:31 AM

    any business owner who does not pass on their costs down the chain is a poor businessman. If your business is not kept viable at all times then you are doing your clients a disservice and you are doing yourself a disservice too.


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