Letting agents fleecing tenants out of £hundreds in admin fees
Published by Max Salsbury for 24dash.com in Housing and also in Communities, Finance
Letting agents are fleecing tenants out of up to £600 in non-refundable fees, new research has revealed.
According to Rentify, an online service for tenants and landlords, agents charge an average administration fee of £220 to secure a rental property in London.
Nearly 25% of the London letting agents surveyed by Rentify charge over £300 in administration fees, with the most expensive agent charging £600 in East Ham.
Rentify CEO George Spencer said: “As if it wasn’t bad enough that letting agents charge these unnecessary administration fees to tenants, some of these charges are also passed onto the landlord so the agent makes double the profit. These fees lack transparency and are simply unfair. Sometimes they cause tenants to pull out of properties because they have not been disclosed upfront, or budgeted for.
Administration costs varied significantly across different agents and areas, with some not charging any additional fees.
And those that do charge them - on top of the standard deposit and one month’s rent in advance - claim that drafting tenancy agreements and conducting reference and credit checks are the cause of the cost.
However, according to Rentify the time spent doing this work is 90 minutes, which means the letting agent is charging the tenant £146 per hour to complete the tasks.
The survey also found that the average fee for a credit check was £50 - a task that costs letting agents less than 20p if bought wholesale, which is usual practice for larger agents.
Mr Spencer added: "The Advertising Standards Authority has ruled that from next month these costs must be clearly displayed in adverts alongside rental prices but there is no onus on agents to make their charges fairer, or better still, remove these unnecessary fees completely.
"These figures are especially interesting in the light of communities secretary Eric Pickles’ recent promise to cut down on rogue agents through compulsory redress schemes. Perhaps Mr Pickles could have gone further by seeking to introduce new regulations, such as a qualification scheme for agents. At the very least, Rentify’s research lends strong support to the view that urgent action is required.”