View the article online at http://citywire.co.uk/money/article/a550279
Tenants are being ripped off by letting agent fees
Letting agents need to be regulated to the same level as estate agents, an independent think tank has argued.
Tenants are being ripped off by letting agents which charge complex, unclear and very expensive fees, new research has revealed.
The range and type of fees charged by letting agents varies considerably depending on where you live, according to independent think tank Resolution Foundation which mystery-shopped 25 letting agents based in London, Manchester and Gloucester.
For a one bedroom flat in London, for example, upfront costs – deposit, admin fees and rent in advance – totalled some £2,166 compared to £1,028 in Manchester and £1,094 in Gloucester.
Administrative fees meanwhile ranged from £95 to £375 across the three cities. And deposits ranged from £487 in Manchester to some £1,099 in London. This proved a big problem for many tenants as they often had to hand over a new deposit before getting their old one back, Resolution highlighted.
What’s more, just two of the letting agents displayed the costs of renting on their websites which meant many renters often only discovered the charges after they had decided to rent a property.
Resolution claims tenants are being let down by an unregulated market and is calling on the government to:
- Regulate letting agents to the same level as estate agents
- Make it compulsory for all agents to sign up to an ombudsman service
- Force agents to display charges to tenants and landlords on their websites and in adverts in a way that is easily comparable across agents
- Consider ways to make it easier for tenants to transfer deposits between landlords
Vidhya Alakeson, director of research at Resolution, said: ‘We need more transparency so tenants at least know what fees they’re facing and to help create a more competitive market’.
‘Given that an increasing number of families have no option other than to rent long term, we need to question why letting agents are not regulated to the same degree as estate agents,’ he added.
Christopher Hamer, the Property Ombudsman meanwhile said: ‘The Government does not see regulation of the sector as a priority and I, therefore, welcome the recommendation of this report that all letting agents should be required to be registered with an ombudsman scheme so that, at least, landlords or tenants can gain redress where they have been disadvantaged by an agent’.
News sponsored by:
From Brazil and Mexico, to Vietnam and Nigeria, the rapidly developing economies of Latin American and frontier markets, which are some of the smaller, less developed economies in the world, provides investors with a wealth of potential opportunities. Discover why BlackRock's investment trust range is well placed to help you make more of these exciting regions.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
More from us
What others are saying
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.