Rip off renting

Tomorrow, MPs will debate and vote on whether to ban letting fees, as part of the Consumer Rights Bill. Shelter has long called for an end to letting fees, with over 16,000 people joining our campaign since June last year.

For England’s 9 million renters, letting agent fees are just one example of the powerlessness of renting. Something that feels unjust but is so ingrained in how renting works. But we wanted to demonstrate it didn’t need to be this way. So last June we set about an experiment. We wanted to show that you just wouldn’t have to accept arbitrary charges in any other scenario – such as when buying a coffee. The point: you wouldn’t accept random fees when buying a coffee – so why should renters have to put up with it when trying to secure a home?

You can see what happened for yourself:

End Letting Fees Video by Shelter

In short people weren’t happy. No one likes being hit with unexpected fees and certainly not when they can see no good reason for it. No surprise then that 1 in 4 renters have said they’ve been charged an unfair fee. And when 1 in 7 renters are hit with fees of over £500 or more you can see why renters feel ripped off.

But fairness is not the only issue. Fees can have a crippling impact on people’s finances. More than half of people who used a letting agency reported experiencing financial difficulties because of fees, 27 per cent said they had to take out a loan or borrow money to cover unexpected fees and 17 per cent cut down on food or fuel to pay the upfront costs. Whilst renters can plan for rent, deposit and moving costs, fees are often not declared upfront and are unpredictable.

And these fees are anti-consumer and distort the market. Renters aren’t the customer of the letting agency – the landlord is. Renters don’t choose the letting agency – the landlord does.  And if the agency double-charges landlords and renters for the same service, there aren’t any rules to stop them. Scotland and parts of Australia have shown it’s possible to end letting fees to renters, there the costs are paid by the customer, the landlord.

We’re not alone in thinking something needs to change. Polling carried out this week shows 67 per cent of the British public support a ban on letting fees, with only 10 per cent opposing. The policy also has cross party support with 71 per cent of Conservative voters and 70 per cent of Labour voters polled supporting the move.

The amendment on Tuesday has been put down by the opposition but follows a gradual political acceptance across all parties that the unregulated lettings market must be tackled. Last month Liberal Democrat MP Julian Huppert laid down a 10 minute rule bill calling for an end to excessive fees. And the government, whilst reluctant to go beyond calls for transparency on fees, have begun to tackle the lack of professionalism in the lettings market by introducing a compulsory redress scheme. It will be up and running from later this year, and for the first time will give renters someone independent to complain to when something goes wrong.

The political tide is turning. Politicians are beginning to recognise the importance of fixing private renting. Ending letting fees is one of those rare policies: It’s simple, it’s popular, it’s worked elsewhere, and it will put hard cash back in the pockets of ordinary renters. It’s time to ban fees for good.

 

 

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13 Comments
  1. Have you thought about the letting agents you will put out of business.
    The service to tenants will be non existent
    Rents will go up.
    I do accounts for several lettings and non of them are rich
    Letting agents will have to cut overheads and therefore make people out of work
    Has anyone thought this through
    It is just a vote winner by the Labour Party
    What about the extortionate payments we have to pay for mortgages to be set up.
    Lay off letting agents they are doing a good job !

    1. Some letting agents are charging silly fees. One tenant was charged £3000. The quality for referencing by letting agents is very poor. In fact, even dodgy tenants can pass it. When I googled the letting agency, I found some landlord had ended up with tenants who were growing weed in the property, so why did n’t their £300 referencing fee catch it?

      The letting agents keep the threshold for passing a reference very low. It is not in the letting agents interest for the tenant to fail a tenant referencing, as they get their letting commission up-front and bad tenants becomes the landlords problem.

  2. What are you on about peter , I lived in a rented house in Berkshire for 3 years , in 3 years I paid the Landlord £30,000 in rent .The was managed by a letting agent who were the the most overcharging , rip off company you could claim to do business with.Each year they charged me 127 pounds to pay for a tenancy that was already in place .When challenged , they said its what they charge ! That was just one charge of approximatley 135 in bedded within the tenancy obligation contract.
    Another was they visited your property 3 times a year , so keep the landlord sweet and film it , you had to pay for this! If you were unavailable to be in that day , they would charge you 35pounds to enter your property to carry out this task.
    So peter when you exactley get to be a tenant or have the unfortunate pleasure to rent from such thieves , then please tell us your story!!!
    Has far as rents going up , I was evicted under a section 21 notice , because the landlord didnt want to repair the property .
    The next day , after I was evicted the letting agent put the board back up and I saw it on the internet at 3oo pounds more per month !!!
    Get your facts right peter !

    1. I don’t believe your story. I know there are various tenants actions group, who just keep spreading this sort of stuff.

      ” I was evicted under a section 21 notice , because the landlord didnt want to repair the property ”

      Why would a landlord not repair your home? What you are saying is that he would rather pay about £1200 in commission to the letting agent to find new tenants, rather then carry out a repair?

      I have never come across a letting agent charge the tenant to carry out inspections. The landlord is paying them for managing the property.

      1. I don’t care about greedy landlords.
        You do it to make money, not because you care about homeless people or those with no where to live or afford thousands in deposits etc.
        My advice to you is get licence as a registered landlord, be independent and draw up your own tenancy agreement.
        Your be more respected and a better relationship with your tenant.

        1. You still have not answered my question

          “Why would a landlord not repair your home? What you are saying is that the Landlord would rather pay about £1200 in commission to the letting agent to find new tenants, rather then carry out a repair at the property?”

          1. Because they thought they could get away with it ! But lm no mug , and sued the landlord who lived in Ireland , while the letting agent lied out out there teeth and were not transparant , and because of this the authorities prosecuted!The reason behind this , so they could increase the rent as the tenant refused on grounds of non repair and maintenance , oh and refused to give contact details of landlord .All breaches of housing law 1985 .
            My advice to you pal , if your been ripped off by your agent , go independant , its not rocket science !

      2. You don’t like negative feedback.then please write a comment about what why your such a wonderful landlord.what you did for them?

    2. If they wanted to put the rent up, then why not do it with the current tenant in place?

      No need to go through all the trouble of evicting to increase the rent.

      The story doesn’t add up.

      1. Not sure who u are, clearly don’t get it!
        The landlord needed to spend 27k to bring property up to rentable value.
        Easy way out for her, serve a section 21.
        If you don’t know what that is I suggest u research it,so it doesn’t happen to you!

  3. When I was advertising my property privately to rent, it was a magnet to every scoundrel tenants with fake references. Some fees, act as a deterrent to fraudsters.

  4. I understand the landlord and I understand Phil . The truth is all good landlords and good tenants
    are scared of the renting market and of each other, most good tenants are found as friends of a good landlord , In most case leaving the
    rest of good tenants on the market to the abuse , which we in are at at the moment which almost cost a family of life and we end up with a section 21 notice 2 days ago , I hope to put it online because it will below section 21 apart, but there is more to this as the landlord said below and what you said phil and I have been at both ends of the housing market 20 years ago as an acting agent for 3 privately renting landlords and I have been a tenant of an agent in surrey with the landlord living next door and I am now a tenant of a private landlord now and what I say about it .. I hate it ..I hate the whole thing . I might have the answer and I do have an answer for the whole housing market, the government will love it , tenants will love it ,Landlords will love it , it will give work , government will get more tax from it , it will stop the house price going up , ( London ). it is a self generating

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