Agent charges letting tenants down

Private tenants are being badly let down by a lack of regulation of letting agents, according to a new report from Citizens Advice.

The report entitled ‘Let down: CAB evidence on letting agents and their charges’ claims that the current system allows letting agents to “operate completely unchecked, routinely ripping off tenants by imposing unjustified and excessive charges and providing a poor or non-existent service”. Such practices are of particular concern given the economic downturn which has left many struggling to stay in control of their finances.

The report is based on evidence from Citizens Advice Bureaux advising on around 6,000 problems with letting agents a year, an online survey completed by 1,300 tenants who visited the Citizens Advice website between August and November 2008 and a survey of 424 letting agents’ terms and conditions carried out by 51 Citizens Advice Bureaux across England and Wales.

The report found that 94% of letting agents imposed up to seven additional charges on tenants, not counting the tenancy deposit and rent in advance, in some cases adding up to over £600. Citizens Advice is now calling on the government to extend plans to regulate letting agents to include a ban on the additional charges tenants often have to pay letting agents on top of their rent.

Additional charges identifies include 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. Citizens Advice found that the charges were often disproportionate to the cost of the work involved.

Citizens Advice Chief Executive David Harker said:

“Government plans to regulate letting agents don’t go far enough. They must include a ban on additional charges, which can be a huge barrier for people on low and even average incomes. 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. The charges often bear little or no relation to the cost of the work involved and in some cases letting agents appear to make them up as they go along.”

“People often think that renting through an agent is a safer option than dealing direct with a landlord, but our evidence clearly shows that it can be a risky business for tenants. While many tenants receive a good service, others are not so lucky, finding themselves paying through the nose for an unprofessional and unresponsive service, sometimes forced to live in dangerous conditions and losing large sums of money if the agent goes out of business.”

“Business for letting agents is booming as the recession forces more people into the private rented sector both as tenants and landlords. Allowing letting agents to go on operating completely unchecked in these circumstances is totally unacceptable. Regulation cannot come soon enough.”