Yet another attempt by Labour to get fees charged by letting agents banned by law was rebutted this week.
An amendment to the Consumer Rights Bill was tabled by Baroness Hayter of Kentish Town – who is also calling for letting agents to be made to have Client Money Protection insurance – and Lord Stevenson of Balmacara during the Committee stage of the Bill.
But speaking for the Government, Baroness Neville-Rolfe said that a blanket ban on letting agents fees could not be the answer to tackling a minority of irresponsible agents and that banning agent fees would lead to an increase in rents.
She said transparency of fees rather than a complete ban would be a better answer.
Yesterday, ARLA said it supports the view that letting agent fees should be transparent, and believes better regulation is needed in the private rental sector to stop rogue agents charging over-the-odds tenant fees.
According to its own research, 74% of “ARLA Licensed” firms charge no more than £250 in tenant fees, with £213 being the norm.
David Cox, managing director of ARLA, said: “Tenant fees cover the cost of essential items during the lettings agreement process such as reference checks, the drafting of the tenancy agreement, and the management of tenancy extension or renewal.
“All of these items cost the agent money to carry out, and provided the agent has a fair pricing structure, the agent will not make a noticeable profit on charging for these items.
“Of course, there are some landlords and agents that do take advantage of the cost of tenant fees. This is where better regulation is needed in the private rental sector to ensure consumers are not taken advantage of.
“We want to see tenants paying a fair price for the service they receive. Regulated agents don’t charge excessive fees. The results of our survey show that on average ARLA Licensed agents charge a reasonable £213 in tenant fees, which we see as a fair price.”
Among ARLA Licensed members, the services which tenants are most likely to be charged for are reference checks, with almost all branches charging tenants (98%), followed by charges for the tenancy agreement (69%) and then fees for tenancy renewal (65%). Nearly six out ten (57% ) of ARLA Licensed agents charge an inclusive flat fee.
The figures are from ARLA research based on 506 responses.
Comments (3)
I have e-mailed Mr Miliband on this subject but did not receive a reply. I asked him to join me on the front line for a period of time and then review the stance he has taken up. No reply.
Why should tenants not pay for a legitimate service? By all means let's have regulation to weed out the excessive chargers, but let's not have yet another example of the law being tilted in favour of tenants. There are so many already.
Who is to pay for the essential screening of applicants, (including the government's immigration check) the admin of setting up tenancies, and all attendant paperwork? Has this to be passed onto Landlord as with Gas Check, Legionella check, EPC, preparation of inventory, Deposit protection etc? I actually think that a case could be made for Tenant contributing to these elements of the Letting process.
We have insufficient "state" housing, and are much more dependent on private renting than ever before. I am afraid that private Landlords will pull out of the rental market if costs are forced to rise through this punitive Labour idea, OR that rents will have to rise.
Is it that Mr M wants to banish agents off the face of the earth? I am only one example of a Letting agent with many years experience who tries to do a good honest job, to be a "safe pair of hands" and who is proud of the integrity of the service I offer. Landlords and Tenants alike appreciate a buffer to talk to about any issues arising.
I view a potential Labour government with horror on the issue. Mags
It is a free market. Applicants can rent direct from the landlord. Just typical Labour trying to ingratiate themselves with potential voters and disregarding the consequences.
Strange that they do not turn their attention on the high cost of mortgage applications, valuations etc.
The average fee is above what we charge and a whopping reference fee £500 by a LSL agents highlights where one problem of a rip off is.