The report from Citizens Advice, a national charity, claims that letting agents are out of control and it calls for the government to extend its proposals to regulate letting agents, saying these must include a ban on the additional charges tenants often have to pay agents on top of their rent.
It says that such charges are usually for carrying out tasks that are no more than the routine business of letting and managing a property. It found that 73% of tenants were unhappy with the service that they got from their letting agent.
The report, called Let Down, found that 94% of the letting agents surveyed imposed up to seven additional charges on tenants, not counting the tenancy deposit and rent in advance. While the amounts varied widely, in some cases these added up to well over £600.
Extra charges included a non-returnable holding deposit, a deposit administration charge, a reference check charge, an administration fee, a check-in inventory charge, a check-out inventory charge, and a tenancy renewal fee. The charges 'often appear to bear no relation to the cost of the work involved', says the report.
It found, for example, that the charge for checking references ranged from £10 to £275, while the charge for renewing a tenancy ranged from £12 to £200. The report also claims it found 'considerable scope for double charging' by agents, with tenants and landlords both being charged for the same service.
Most tenants said the agent was very helpful initially but this changed completely once they had been signed up to the tenancy. One of the biggest problems was getting repairs dealt with. Many tenants reported difficulties getting through to the agent and said that when they finally did, they were met with an unprofessional and unco-operative response.
'Government plans to regulate lettings agents don't go far enough. They must include a ban on additional charges. There are so few controls over who can set themselves up as a letting agent and the charges they can make that it is tantamount to a licence to print money,' said Citizens Advice chief executive David Harker.
Evidence for the report came from charity's caseload of around 6,000 problems with letting agents a year, plus an online survey completed by 1,300 tenants who visited the CAB website between August and November 2008. The body also studied the terms and conditions of 424 letting agents across England and Wales.
