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MSE News: Letting agency fees 'truly out of control'



  • Reue
    Reue Posts: 569 Forumite
    Manchee wrote: »
    Unless you're advocating not informing the LL about additional occupiers or pets.

    Im on the fence about this. Ultimately, why should/would it matter as long as the rent is paid and the property returned to the same state at the end of the tenancy.

    Personally I did inform our landlord when we go a rabbit as a matter of courtesy. Note* it was inform.. not ask :D
  • kaych
    kaych Posts: 376 Forumite
    First Post First Anniversary Combo Breaker
    A friend paid rent on time and everything was well, he lived in his flat for more than a year with no problem. One day received a letter from the agent saying the landlord wanted him out. He was confused, packed his stuff and found a new place. A decorator came in to do some work to this flat before he moved out and they got talking. The decorator asked why he was moving out, my friend explained about the letter and the decorator told the landlord. Apparently the landlord got a similar letter from the agent saying that my friend wanted to move out. At the end, the agent admitted they sent both letters and paid compensation to my friend. The landlord then cut the agent out and rented to my friend directly since then.
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    whats worse is when the letting agent then charges you the same fee again if you were to move to a new property with the same agent, even though they have done all the referencing etc and know you're a good tenant
    The landlord probobly requires it.

    Before taking on a new tenant, I would want up to date credit checks/refs, and would instruct my agent (if I used one) to obtain these.

    Even if the tenant had previously rented from a different LL via same agent.

    Yes, I would take the agent's reference of the tenant into account, but that is just part of the decision.

    Of course, I would also check howmuch my agent charged my prospective tenant for this - if the tenant is p*ssed by an excessive fee before the tenancy has even started, it sours my LL/tenant relationship from the beginning.....
  • princeofpounds
    princeofpounds Posts: 10,396 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    I've posted it several times, but the market structure of lettings does not promote proper competitive forces.

    It is heterogeneous, which is a fancy word for saying many houses very different and not easily substitutable. It is not normally possible, for example, to go for a 4 bed or a 2 bed if what you need and can afford is 3. Often search areas are very restricted for reasons like work, transport, schooling and so on.

    It is illiquid, which is a posh word for saying it does not turn over that quickly. During the brief 6 week window you typically get for looking for a new rental (which may be made even briefer by the amount of time you can take off work), you may only spot a couple of properties. Sometimes those suitable properties are all with the same agent.

    These two factors combine to make the market very oligopolistic. Which is a posh word for saying lettings agents are able to screw you. As a tenant, you often have little practical choice of which agent to work through.

    Now I'm always very nervous of regulation. Although I'm a red-blooded capitalist in many ways, I do believe it can have a place because not all markets are free and equal in their inherent structure.

    But I think a big start, one that is not economically distorting, would be for transparency to be enforced. LAs should have to declare their charging structure up-front and publicly to both T and LL, so that all sides are aware of their 'cost' in the process.

    Currently most LLs seem blind to the fact that every £ the tenant pays to the agent is a £ out of the accommodation budget. Out of sight, out of mind.

    And where T's really get stung is when the agent refuses to do some necessary and ultimately very standard work (such as contract renewal) without the payment of an arbitrary and extortionate fee (and usually without the LL's knowledge).
  • shinkyshonky
    shinkyshonky Posts: 2,782 Forumite
    It definitely is a seller`s market...and with desperate tenants willing to let can see the LA`s rubbing their hands with the scammers advertising flats for let with requests for moneygram/western union transfers of deposits...before a person can review it (and believe me people are still falling for this scam)you can certainly see it`s a horrible stressing time looking for a place to rent
    “When the debate is lost, slander becomes the tool of the loser.” Socrates

    Haters gonna hate
  • DJ_Mike
    DJ_Mike Posts: 247 Forumite
    First Post First Anniversary Combo Breaker
    It's not just the up-front fees either.
    1. Every year I have to pay £120 to renew my tenancy for another year
    2. When my girlfriend moved in, I had to pay an additional £120 to update my tenancy
    3. When I requested to purchase a family dog, I had to pay - you guessed it - another £120!

    I can't wait to buy my own house and give my letting agents the finger.

    Yes. Whereupon you can start cursing banks over their extortionate mortgage fees instead!
  • beetlejoose
    DJ_Mike wrote: »
    Yes. Whereupon you can start cursing banks over their extortionate mortgage fees instead!

    Nah, I'm buying outright ;-)

  • DJ_Mike
    DJ_Mike Posts: 247 Forumite
    First Post First Anniversary Combo Breaker
    Nah, I'm buying outright ;-)

    Don't forget good old stamp duty too!
  • suestew
    suestew Posts: 361 Forumite
    First Anniversary First Post
    I agree that LA's fees are extortionate and that it needs more control. I think there should be set fees for the process of setting up a tenancy agreement and they need to be a lot less than most of us are paying, it seems the fees differ greatly between agents. Deposits of up to 5 weeks is sufficient.
    We paid £150 + VAT each this year and the agents didn't have to reference us as we paid rent up front, we didn't receive a reduction in the cost. We also paid 5 weeks deposit + a further £200 for having cats (which I don't mind, it protects the Landlord), we could afford this but I do feel for people that can't.
    Renewing a tenancy is another way they get costs back and what do they actually do for it?
    Definitely needs to be regulated, but when will that happen?
  • molerat
    molerat Posts: 32,007 Forumite
    Name Dropper Photogenic First Post First Anniversary
    edited 12 June 2013 at 4:17PM
    MSE Helen, please amend your title to add "English". Scotland has already got this under control. About time England followed that model.

    From Shelter Scotland
    Letting agent fees are unlawful in Scotland

    If you’ve been charged any of these by your letting agency in the last five years, use our FREE toolkit and claim back what you’re owed.

    Credit checks
    - fees for carrying out credit checks
    Reference checks
    - fees for carrying out reference checks
    Inventory fees
    - charges for checking and preparing an inventory
    Renewal fees
    – any administration charge to renew an existing tenancy
    Holding fees
    - any non refundable 'holding fees' or similar payment as an inducement to grant a tenancy
    Copies of the lease
    - charges for arranging duplicate copies of the lease
    Transfer fees
    - a payment to formally transfer a tenancy to someone else (known as ‘assignment’)
    Overpriced furniture
    - sale of furniture to a tenant for an excessive price
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