MPs have been officially advised that letting agent fees are “extortionate”.
The advice is in a new update on the regulation of letting agents which has been published and lodged in the House of Commons library.
Although the paper starts by pointing out that in fact there is no statutory regulation of letting agents in England, it does make reference to recent and forthcoming pieces of legislation.
These include the Enterprise and Regulatory Reform Act 2013 which will make it mandatory for all letting agents to belong to a redress scheme at some point “later this year”.
The paper also refers to the Consumer Rights Bill, currently going through Parliament, which will require letting agents to publish a full tariff of their fees.
It contains a reference to research by self-service lettings firm Rentify, saying that the research reveals “just how extortionate average letting agents are”.
It says: “The charges just for renting a one-bedroom apartment in London could go as high as a staggering £600 (an agent in East Ham) with the average for the capital coming out at £220. The picture is not much rosier elsewhere in the UK: Bristol has the highest average fees of £251 and Liverpool the lowest with £137, which is still the equivalent of 6 weeks food shopping for the average person.”
The paper, which does not challenge its claim, says that while the previous Labour government wanted to regulate the lettings industry, the current government does not.
It does, however, concede that anyone can set up a letting agency – and it is possible that the researchers could usefully be talking, as Eye was only yesterday, to a tenant left out of pocket by Daniel Burton’s Unida Place agency.
The 25-page paper has been published as a supposedly dispassionate briefing aid to MPs. You might like to write to your own MP.
Comments (9)
Stamp Duty is "extortionate”. I'll write to my MP tonight and hopefully he will have a bill rushed through, abolishing these fees before the end of the month!
Brilliant – Best comment
Well said everyone! On the point of ARLA, in their defence, I believe plenty goes on behind the scenes in terms of lobbying government on points that matter to us. HOWEVER, having been a member for more than 20 years, it saddens me to have to say, year after year, that they still seem to be such a "closed-in" association. Frankly, it's ridiculous that by now members of the public do not more or less insist on checking that an agent is a member of Arla (or similar organisation). And further, it saddens me that they are not more "user friendly". The best example I can give of what I mean is that of TDS before Steve Harriott took the helm. TDS was very much a closed off organisation. It was virtually impossible to get past the call centre, and there were few other communication channels available. Nobody enjoyed dealing with them. Nowadays, what a difference! You can easily get them on LinkedIn, Twitter, email and telephone. They are constantly evolving new ways to improve their service and to educate not just agents, but landlords and tenants as well, on how best to avoid deposit disputes; as well as how best to present a dispute for adjudication if there is no other course. They have won awards for their customer service, and quite rightly so. My hope is that Arla's new MD will do for Arla what Steve Harriot has done for TDS.
I can see all us hard working, established Agents are getting wholly peed off with this Agent bashing so I implore all ARLA members reading this to strongly lobby ARLA to PULL THEIR FINGER OUT!
Enough is enough.
Totally agree with James and Robert! What is ARLA doing? They are constantly telling their Members to promote ARLA to landlords at every opportunity but isn't that their job? Oh, sorry, they must be exhausted from setting up an employment agency site. So much more important to make sure that letting agents can find jobs. In the meantime their Members are being slated in the media at every turn. Landlords do not care about (and rarely even know of the existence of) ARLA – what they care about is how low they can screw the agents fees. I cannot remember in over 20 years having a prospective tenant complain to us about our fees and charges but that is because our fees are fair and affordable. We are not greedy. The charges levied by the majority of other agents (including ARLA members) are shocking and need to be reigned in. But, all letting agents are tarred by the same brush and it is the greedy ones who are putting the reputation of our industry at risk.
Hello Denise I have spent some time on Linkedin where the RICS group has been discussing the Crisis in Housing, it is very apparent that some government influencers are simply out of touch with a sector of the industry they only briefly touched on during their studies and work experience placements in the 1970's.There was a story on here a while back where academics where handing down all sorts of erroneous knowledge and now doubt that will be gobbled up by government too.
Because our Ministers and MP's have no working knowledge of the industry their detachment from the consequences of their policies means that the next crisis is simply another political point scoring opportunity. Housing needs to be apolitical and should be removed from the effects of political change, ignorance and vested interest lobbying.
I wonder what 'extortionate' fee the researchers charged the government for this information?
Letting Agents are not charities and as long as fees are disclosed from the outset and in a free market any Tenant has a choice. £600 is too high and I wouldn't pay that but if the average fee is £220 this is far from extortionate considering the hoops Agents already have to jump through.
The industry needs to come back fighting – ARLA have been far too quiet on this issue.
One has to wonder what process is employed when appointing researchers.
How and why is it possible for researchers, with no obvious or traceable experience or qualification of the industry, to brief government and so influence legislation and policy?
i think the hole thing is a joke
the government keep saying they want more houses built but don't build ???
they need us as landlords stop ******* us around if 20% of landlords sold up what would the government do??? **** THEM SELVES
plus they also want people on the property ladder who also have to pay a mortgage application fee??????
seems like the government want to rob peter to pay paul to me in stead of helping the situation. if there that concerned about helping tenants take the VAT off save the tenants ££££s that way