Letting Agent Fees – The Hidden Truth

Letting Agents are in the firing line yet again for “rip off” fees, many of which are often hidden and so come out of nowhere to unsuspecting tenants, often forcing them into debt.

In 2013 the Advertising Standards Authority put into place a requirement stating that all agents should provide clear, concise information about their letting agent fees.  Despite this requirement it seems that many are still not towing the line, an option that will soon be quashed with the requirement due to be enforced by law later this year.

That said there are some reputable agents that are way ahead of the game, like this letting agent in Southampton.  Belvoir already publish a full list of their letting agent fees on their website giving full transparency to their tenants.

So what is it that Letting Agents are actually permitted to charge for?

We all know that there are a range of letting agent fees that are payable both before moving into a property and during the tenancy, but what are they?

Holding Deposit

So you seen a property you like and don’t want anyone else to have it.  This is when the agent can ask you for a holding deposit to reserve the property until you have signed the tenancy agreement.

Tenancy Fees

These charges cover all of the administration that is required to set up your tenancy.  This can include processing tenant references, drawing up the tenancy agreement and property inventory, credit checks, administration of the Deposit Protection Scheme which is now required by law and checking you into your new home.

Property Deposit

Once the tenancy agreement is signed the letting agent will ask you for your deposit.  This usually consists of an amount of rent in advance as well as a tenancy deposit.  This give the agent protection against any damage that may be caused to the property as well as against the tenant leaving without paying the rent.  This deposit now has to be protected by law in an approved government scheme.

Additional Administration Charges

These charges generally only arise as a result of payment or paperwork issues, for example:

  • Duplicate agreements, inventories or statements
  • Late rental payment
  • Credit card payment charges
  • Issue of a breach of terms letter

So what aren’t Letting Agents fees permitted to be charged for?

Registration

A letting agent is not permitted to charge you for registering with them in order that you should be allowed to view their list of available properties.

It is a criminal offence for an agent to request this type of fee.

It’s not just Tenants

It is not just the tenants that are at the mercy of letting agent fees, but landlords too.  Another reason for more stringent laws to be put into place is the scandal of “double dipping”, as reported by the Guardian.

With the property rental market having been so lucrative over recent years, with many home owners having been forced to sell up and rent, the fat cat agents have been rubbing their hands together with glee and taking full advantage.  It has come to light that not only are tenants being stung with hidden costs, but these exact same costs are also being charged to the unknowing landlord.  An outrage!

Is it time that we followed in the footsteps of Scotland and put a stop to letting agent fees to tenants in the UK?   What are your thoughts?

 

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