For many people, a letting agent will be the first port of call when looking for somewhere to rent but be aware that they can come with extra fees.
Letting agents will advertise rental properties, arrange viewings and help negotiate the tenancy agreement.
In some cases they even manage the property on behalf of the landlord - so it's worthwhile investigating just how involved your letting agent will be.
You may be charged for setting up a tenancy agreement, conducting an inventory, checking references and credit reports, and registering the deposit in a government-approved scheme.
Our research found the average cost for mandatory administration and referencing fees across all agents was £310, and the highest was £420.
Some tenants could also face check-in and check-out fees, bringing the total closer to £600.
The Consumer Rights Act 2015 has made it a legal requirement that letting agents in England and Wales must clearly display all their fees at their business premises and on their website.
The list must be inclusive of VAT and should include a description of each charge or fee, whether it applies to each property or each tenant and what it covers.
In November 2016, the UK government announced in its Autumn Statement that it plans to ban letting agents fees for tenants in England, with a view to introduce the ban as soon as possible.
A new draft Tenant Fees Bill to ban letting fees for tenants was introduced to Parliament on 1 November 2017, bringing the proposed ban one step closer to being brought into law in the future.
The Welsh government launched a consultation on proposals to ban letting agents from charging fees to tenants, which closed in September. The results will be announced at a later date yet to be confirmed.
Letting agency fees have been banned in Scotland since 2012.
Northern Ireland is still considering its options.
A perk of dealing with letting agents is that they must be part of an approved redress scheme that can mediate in disputes between landlords and tenants.
The letting agent must clearly state which scheme they are members of. The three government-backed schemes are:
- The Property Ombudsman (TPO)
- Ombudsman Services Property
- The Property Redress Scheme
A local council can issue a fixed penalty fine of up to £5,000 to a branch of a letting agency that fails to join one of the schemes.
A letting agent may ask you to pay a holding deposit, especially if you are searching in big cities such as London.
A holding deposit is paid when you intend to rent a property and want the letting agent to place a hold on the property being shown to other prospective tenants, while you go through the referencing process before you sign a tenancy agreement.
If you pay a holding deposit to the letting agent, it means that you’re committed to renting the property and that the landlord is committed to renting the property to you, providing checks are successful.
At the moment, holding deposits don’t have to be protected in a deposit protection scheme, so you may have difficulty getting all of your holding deposit back if you decide you no longer want to rent the property.
Learn more about holding deposits and steps you can take to safeguard your money by reading our holding deposit guide.
The tenancy agreement
The tenancy agreement is a contract between you and your landlord.
Most tenancy agreements are an assured shorthold tenancy agreement for a fixed term - usually six to 12 months.
Beyond that there are two main types of tenancy contract that your landlord might offer:
- A joint tenancy agreement This holds the whole group responsible for the property and collective rent payments.
- An individual contract This contract is between each tenant and the landlord. If you have the choice, ask for this type of agreement as this means if one person leaves the house for any reason or pays rent late, the other tenants will not be liable.
The tenancy agreement is a form of consumer contract and as such it must be in plain language which is clear and easy to understand.
It must not contain any terms which could be ‘unfair’. An unfair term is not valid in law and cannot be enforced.
What should it say?
Your tenancy agreement should contain the following information:
- Your name, your landlord's name and the address of the property which is being let
- The date the tenancy starts
- The duration of the tenancy from the start to the agreed finish date
- The amount of rent payable, how often it should be paid, when it should be paid and when it can be legally increased
- What payments are expected, including council tax, utilities and service charges
- What services your landlord will provide, such as maintenance of common areas
- Whether any other bills/charges are included in the cost of your rent, such as council tax or water rates
- The notice period which you and your landlord need to give each other if the tenancy is to be terminated
What will happen to your security deposit?
According to housing charity Shelter, one in five private renters in England don’t know if their security deposit is protected.
Make sure any deposit given is paid into an accredited tenancy deposit scheme, protected under one of the three government-approved Tenancy Deposit Protection Schemes.
Your landlord is legally required to place your deposit into an authorised deposit protection scheme within 30 days of receiving it. Your landlord must also give you details of the scheme used, alongside information about your rights.
The Housing Act 2004 helps protect all parties with regard to the return of tenancy deposits and outlines the following:
- Landlords are required to join a statutory tenancy deposit scheme, if they take deposits. This means that deposits are safeguarded.
- Tenants will get all or part of their deposit back if they have kept the rental property in good condition and are entitled to get their deposit back.
- The scheme offers free Dispute Resolution, which aims to be faster and cheaper than taking court action.
If your landlord doesn't protect your deposit, a court can order them to pay you a penalty of up to three times the deposit - although this is rare.
Have you got an inventory?
An inventory is a checklist for both the landlord and tenant to list what items are included under the tenancy, any faults with the house and the condition of any furnishings.
Both parties then sign it off, so make sure you check all the details thoroughly and that they are correct.
At the end of the year the house is checked against the inventory and the deposit is paid back accordingly.
Take your own photos of rooms and make notes of any faults, as well as taking a photocopy of the inventory as evidence if there are any claims against you at the end of the tenancy.
Your responsibilities as a tenant
As a tenant you must:
- Pay your rent on time as agreed
- Pay other bills. In most long-term lets, you'll be paying council tax, utilities (including water), TV licence and telephone bills
- Respect your neighbours, so don't make excessive noise, put rubbish in the wrong place or obstruct common areas
- Tell your landlord if you are going away for longer than 14 days, because this will affect his/her insurance policy
- Keep the property secure at all times, so lock it when you go out and don't give keys to anyone else
- Tell your landlord when things need fixing to avoid bigger problems later - eg a leaking pipe, if not maintained, could make a ceiling collapse
- Do basic maintenance such as changing light bulbs or smoke alarm batteries
You should not
- Engage in any illegal activity at the property.
- Alter the property in any way, including hanging anything on the walls or redecorating without written permission from your landlord.
- Use the property as a business.