According to new evidence uncovered by a charity, Citizens Advice, tenants are frequently ripped-off by fees often hidden by letting agents to the tune of £337 on average.
These charges come on top of advertised rent prices and deposits and in some cases can force people into debt, the report says, adding that letting agents have refused to adopt measures that were supposed to bring transparency and competition to the market.
Most agents charge for checking references, but costs range from as little as £6 to £300, according to the study. Renters can also be hit by charges ranging from between £15 to £300 for simply renewing their tenancies. Some agents charged £300 for credit checks that are widely available for £25.
Even when moving out of a property, almost half of the 353 agencies polled by Citizens Advice said they charge an average ‘check out’ fee of £76.
Despite an Advertising Standards Authority (ASA) requirement introduced in 2013 that agents should give clear information about fees, this study found that only a third provided full written details.
The requirement will become law later this year which will mean agents have to publish fees on their websites and in their offices. But Citizens Advice is concerned this will have little impact.
The report says people face a lot of pressures when looking for a property and the main priorities amongst tenants is location and the price of rent. Fees often do not get disclosed until later in the process and only 25% of tenants told this study that they took fees into account when leasing a property.
The charity says it does not call for a fees ban ‘lightly’, but said alternative measures have not worked. It adds that if charges are to be made, they should fall on landlords as they are in a better position to shop around and pick the best agency.
A fees ban was introduced in Scotland in 2012 and there is no clear evidence to suggest it has led to an increase in rental prices, the report adds.
Almost 90% of renters told the report that the charges caused them problems. A fifth said they went overdrawn on their bank accounts as a result and 42% had to borrow from friends and family.
‘Letting agents hold all the cards meaning tenants are open to abuse. Renters are regularly stung by arbitrary fees which can range from modest amounts to hundreds of pounds,’ said Gillian Guy, chief executive of Citizens Advice.
‘Our research confirms renters don’t shop around for letting agents, they shop around for properties so the idea that transparent fees will solve these problems is misguided. Landlords can hold agencies to account so it is right that they should shoulder the responsibility of fees. That would end once and for all the situation in which letting agents charge tenants what they like,’ she added.
The report also says that despite a new requirement for letting agents to be a member of redress schemes, nearly a fifth are not. The aim of the redress schemes are to offer an avenue for renters receiving poor service to escalate complaints.
Citizens Advice also recommends that agencies should have to belong to trade bodies, who could name and shame those acting unfairly.
In the last year more than 80,000 people came to the charity suffering with a problem with a privately rented home. Common issues include illegal eviction and harassment, lost deposits and struggles to secure the most basic repairs.
