Letting agent fees should be scrapped, charity says

12 June 2013

Letting agent fees are "out of control" and should be scrapped, a housing charity has warned. According to Shelter, the fees charged by agencies are pushing renters into debt and forcing them to cut back on food and heating.

Research by the charity found one in four people who have dealt with a letting agency in the last three years said they had to borrow money to cover the charges. One in six said they had cut down on food and heating to pay the fees, and one in four said that letting fees stopped them getting a new home.

Renters face charges on average of £350, on top of deposits and paying rent in advance, Shelter says.

Its researchers found that nearly 30% of letting agents hit renters with charges of more than £400 to set up a tenancy, with 12% of letting agencies charging more than £700.

Campbell Robb, chief executive of Shelter, said: "When renters have to find hundreds of pounds in fees each time they move – on top of deposits and rent in advance - it's not surprising that fees are causing real financial hardship, and in some cases preventing people from moving at all."

The charges include ‘administration' fees, ‘holding' fees, credit check fees and ‘check-in' fees. The charity says these charges are non-refundable with some agents, even if the deal fell through.

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Robb added: "The only way to fix our broken lettings market is for the government to stop renters being charged for the costs of setting up a tenancy. This would put landlords in a stronger position to negotiate the best deals, restoring healthy competition to the market and releasing renters from the burden of paying out hundreds of pounds in sky-high fees."

Franco Cirillo, director of Dorrington Residential, said: "It isn't right that prospective tenants are asked to pay hundreds of pounds in fees, as well as deposit and rent in advance, for a service that landlords commission."

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