Are letting agents helping to lock renters out?

Low income renters are in a precarious position. The help they get to pay the rent is shrivelling, whilst rents are blossoming. Its little surprise that half of private renters say they are already struggling or falling behind with their rent. Amidst this uncertainty, letting agents have become a formidable gatekeeper of the private rented sector. They’re helping to lock renters out of renting by making it difficult for them to find a home in the first place – and that’s before they even get to the problem of rent.

Letting agent fees have long been a headache for renters, especially those on a tight budget. Last year, government changed the law so that agents have to display their fees, but transparency doesn’t seem to be helping renters. In fact, things seems to be getting worse. We’ve received reports of letting agents charging tenants just to view properties and our research found that one in seven renters using a letting agency paid very high fees of more than £500. (Have you ever been charged ridiculous fees? Tell us about them here.)

On top of this, agents are now asking renters to meet extra financial conditions to rent a property. They’re asked to provide employer references or to name a guarantor – another person who will pay the rent if the tenant fails to. Our research found that some homeless households were expected to provide a guarantor earning over £30,000. Some renters are simply unable to meet these financial conditions.

Worryingly, some renters on housing benefit are being refused accommodation just because they are on benefits, not because of their ability to pay. Over one in five tenants claiming housing benefit say they had been actively refused or prevented from moving into a home due to a ‘No DSS/HB’ policy. Ever noticed the ‘no-DSS’ signs that adorn letting agent windows and online adverts? Yes, agents are paid to safeguard landlord’s rental income, but does this justify screening out whole swathes of society before they even walk through the door?

We know renters face frequent and expensive moves, but the stakes are highest for low income renters. Between moves tens of thousands of people are being locked out of renting all together:  the single leading cause of homelessness is the end of a private tenancy. Whether pressure from landlords is changing how agents behave, or agents are simply reacting to the external environment – the effect is the same. Letting agents are helping to lock low income renters out of the market.

So what needs to be done? Firstly, we need more genuinely affordable homes so people aren’t locked out by high rents, as well as realistic support for low income renters to pay their housing costs.

But in the meantime government need to take a closer look at what is stopping renters from finding somewhere to live, so they can be helped into renting. A good start would be removing the unnecessary financial hurdle created by letting agent’s fees.

It’s clear that renting needs fixing. If you agree join our campaign.