Many tenants think that they have been overcharged by letting agents.
About a quarter of renters believe that they have been charged excessive fees when renting a property, says housing charity Shelter.
Overcharging by Letting Agents
Letting agency fees include: administration, inventories, credit checks, and contract renewals. These fees have increased in the last few years, however there is no sign that letting agents are facing higher costs.
The research also revealed that the fees do not correspond to actual costs. For example, credit checks cost between £8-£25 to conduct, but tenants can be charged up to £150 for the service.
Jane Ingram, President of the Association of Residential Letting Agents (ARLA) commented on the findings, saying that there is a need to regulate letting agents and provide tenants with clarity over charges. She also stated that letting agents’ services cannot be conducted at no cost, and there will always be a need for charges.1
In Scotland, all letting agent charges, beside rent and deposits, have become illegal. However, letting agents are now saying that they will have to increase rents due to this. There are no plans to make these charges illegal in England.
Landlords also face high charges if they use a letting agent.
Letting agents who charge reasonable amounts to both tenants and landlords generally produce more stable, long-term tenancies. Agencies charging high renewal fees and annual credit checks can often drive tenants away, causing void periods for landlords.