Are you being hit by 'unfair' letting agent charges?Which? research finds letting agent frustration

24 November 2012

New research by Which? has found that rental tenants feel disempowered and dissatisfied with their letting agents. We found that lettings agents are ranked second from the bottom in our comparison of markets.

Tenants hit by unexpected charges from letting agents

Unfair fees are another area of consumer detriment that Which? uncovered. Less than a third of tenants said that agents provided information about fees before they asked, which hints at a lack of transparency in the industry. 

We also found that of the 32 lettings agents we looked at, none provided fee information on their websites. For more on how rentals work, read our guide to Renting a home.

Which? found that 41% of tenants think that upfront fees on rentals are unfair. Holding deposits cost an average of £400 (or one week's rent), deposits cost £1,000 (one month's rent plus six weeks' rent) and deposit administration fees cost up to £29.

And that's without the credit reference check, which can cost almost £100, and the administration fee – which can be as much as £420. Some 64% of consumers reported having to pay administration fees, while three-quarters told us they had to pay deposits when taking out a rental contract. Almost half (47%) said they had to fork out for a holding deposit.

If you've been stung by unfair letting fees, find out how to complain about your letting agent in our guide. 

Bad practice in the lettings market

Complaints to the Property Ombudsman have increased by a quarter this year. Which? found evidence of aggressive sales tactics, poor customer service and – shockingly – misleading consumers through out-of-date advertising.

Tenants aren't the only ones affected. Landlords were also found to have lost money because agents fail to pass on rent or unfairly handle holding deposits, and we also found that some letting agents fail to put deposits into protection schemes – something that is required by law. Our guide on Tenancy deposit schemes has more information on this.

Which? wants action taken on letting agents

Two-thirds of all private tenancies involve an agent, so this isn't a small problem. If you're planning on renting a property, always make sure the agent is a member of a professional body. We found that 62% of tenants and nearly half of landlords (45%) didn’t conduct a check on their letting agent.

Which? is also working on changing this bad practice. We are calling for increased consumer protection in the rental sector by extending the legal protection for people buying and selling rental properties. To find out more about how Which? works for you, visit our Campaigns page.

This would ensure that lettings agents are covered by the same legislation as estate agents, making them more tightly regulated and giving the Office of Fair Trading the power to ban agents who break the rules. It would also require them to sign up to an ombudsman scheme.

'Greater transparency' from letting agents

We also want to see more transparency from lettings agents. This means fees being included in upfront quotes, in adverts and on websites. We also want terms and conditions to be provided in full.

Which? executive director Richard Lloyd says: ‘People searching for a rented home through a lettings agent are too often hit by unexpected fees or an unacceptably bad service. With the private rented sector now the only option for millions of people, it is vital that more is done to protect both tenants and landlords.’

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