The Labour Party has returned to the fray on letting agents’ fees – which it will ban if it wins May’s election.
It claimed that tenants are paying “extortionate fees” to letting agents, averaging £1,193 upfront. However, rather hidden away in the latest onslaught is the fact that the the sum includes deposits.
When rent is included, it says the average upfront cost for tenants is £1,913.
It said that in London, upfront fees and deposits can reach £2,529 without rent, and £3,990 with rent added in.
The party said that in a survey of letting agents “Labour found a disturbing lack of transparency among letting agents; half did not reveal their fees on their website, and two in ten failed to reveal their fees when they were contacted”.
Labour says it found that some letting agents charge as much as £606 for administration fees, £234 for check-in and inventory, £180 for a new contract and £354 for changing the name on a contract.
Shadow housing minister Emma Reynolds said: “Renters face thousands of pounds in upfront costs but in return they get no stability, poor standards and they have to pay hundreds of pounds in rip-off letting agent fees.
“The Tories have nothing to offer Generation Rent but empty promises and more of the same polices that have delivered the lowest levels of house building in peace time since the 1920s.
“Labour has a better plan for working families. We will give private renters a better deal.
“A Labour Government will ban letting agent fees on tenants, introduce three-year stable tenancies, and put a ceiling on rent rises over the course of the contracts.
“Labour will also tackle the root causes of this crisis by getting at least 200,000 homes built a year by 2020.”
No information is given about when Labour’s latest survey of letting agents was carried out, or what the figures involved were, but in 2013 the party analysed 91 letting agencies in England and upfront charges.
It found then that tenants were having to pay an average of £902 in upfront charges (in London £1,700). When rent was included, upfront costs to tenants rose to an average of £1,626.
In 2013, Labour said three-quarters of agents were not transparent about fees on their websites, and fewer than half gave their fees via email.
In a new piece (see link below) by Ruby Stockham of ‘Left Foot Forward’, this regional chart is given.
The second column shows average deposits and fees, and the third shows the figure with upfront rent added in:
| London | £2,529 | £3,990 |
| South East | £1,500 | £2,364 |
| South West | £1,086 | £1,779 |
| East of England | £1,269 | £1,959 |
| East Midlands | £893 | £1,430 |
| West Midlands | £957 | £1,524 |
| Yorkshire and the Humber | £919 | £1,454 |
| North West | £737 | £1,269 |
| North East | £772 | £1,254 |
| ENGLAND | £1,193 | £1,913 |
The information can be found on Left Foot Forward here
Comments (16)
For anyone reading this who is conned into thinking that letting agents are charging huge fees by the ridiculous figures quoted by the communists (oops – sorry) Labour, consider the real figures:
£3990 – £2529 = £1461 average rent in London
1.5 x the rent = £2190 (approx) this is the average deposit paid by most London tenants as a damage security for the landlord.
£2529 – £2190 = £339 ….. THIS is the actual average fee charged to tenants by London agents according the figures quoted – not even sure if this includes VAT? But how is this extortionate given that this would probably be the total paid by a couple (as most tenancies are to couples).
The deposit is the tenants money which they get back at the end if there is no damage or other losses caused to the landlord. I would like to know how many Labour MPs are landlords and whether they waive the damage deposit for their tenants?
No, I thought not.
We charge 1x tenant £275 +vat admin fee
We charge 2x tenants £375 +vat admin fee.
It includes everything nothing extra they need to pay us.
The rent price/deposit is irrelevant and should not be added into a debate about letting agents fees. Show the fees – simples. Nothing to hide, not ashamed of them. Not unreasonable.
3 year stable tenancies !?! so if a LL wants to rent out a house as he is working abroad for 1 year he will have to do so for 3 years if the tenants wants it? Seriously ?
What if a long term landlord wants to sell up to fund whatever he may like (cancer treatment/nursing home fees)- he wont be able as the tenant has a right to stay for 3 years?
oh yes and then the future Revenge Eviction Act – he cant issues the notice requiring possession due to some outstanding maintenance and has to wait a further 6 months,
oh yes and this then takes the tenant beyond their right to rent visa limit and the the LL/agent gets fined for allowing them to rent. Clearly a deposit dispute would then arise free of charge to the tenant, and just for fun would follow by a free complaint by the tenant to the Omnibusman.
Have Labour got any practical understanding of letting? How is all this funded?
What do you get from Labour ? hidden figures/mirrors & smoke and weasel words.
Labour are saying that their policies will make tenants homeless!!! If tenant fees are abolished at the end of the day costs will be passed to landlords. They in turn may make the decision to exit the PRS thus selling their property with the poor tenant being turfed out on the street. Tenants need to be made aware of this!!!!
Politicians understandably fail to grasp the concept of fees. After all, they expect us to do their immigration checks and anti-money laundering checks free of charge. I would love Ms Reynolds to spend a day with one the network to appreciate the amount of work involved and perhaps a trip down the high street to see all the agents who flout existing rules unchecked. I would even buy her lunch as I understand the squeeze on expenses.
Typical Labour, we will win by getting all renters on board… Forgetting entirely that there is a league of letting agents and landlords that we will completely alienate in the process! Good luck Labour…. You are going to be needing it!
‘If Labour Win’ – Pointless article.
Adding the deposit to the ‘fees’ total is just spin and nonsense.
There is very little comment on region or whether the fee matches the service in all the hot air.
“Renters face thousands of pounds in upfront costs but in return they get no stability, poor standards and they have to pay hundreds of pounds in rip-off letting agent fees.” Excuse me but this is a bit of a generalisation. Does this apply to all those agents who choose to be regulated and follow guidelines as well as those who aren’t but provide a sterling service?
“All MPs are power hungry liars.” Somehow this one seems a bit more likely…
Holy Moley, I think I need to put my prices up! £600 admin fee? £234 check-in/Inventory? £354 to change a name?? To remove a tenant there will be charges, as they may need to be credit checked to make sure that they can afford the rent but still…
We charge the Landlord for the inventory anyway.
I wasn’t planning on voting Labour anyway, but I’m definitely not now!
Sensational stuff Labour Party! Wow!! Very misleading. You are trying to deceive the British public into voting for you. Stop faffing around and just cap fees to tenants at a sensible amount. And whilst you’re at it, introduce hefty penalties for agents not displaying their fees to tenants.
Let’s not have tenants pay a deposit or rent then…
Why does Ms Reynolds include the deposit and first months rent in her totally misleading figures? Without these there isn’t really a story.
What a load of old tosh! It’s about £350 where I am excluding deposit and why are they arguing about taking a deposit??
Go ahead and ban fees all that will happen is landlords cover them and put up rent. Let’s say rent is £800 now, if the fees on both side work out to £600 all the landlord and letting agent will do is put rent up to £900 per month to cover it. What you will then find is the agent takes an admin fee for the 6 months of £100 plus their % fit management. After the 6 months letting agent reverts to just % and landlord £100 per month better off. Over the year the tenant is paying an extra £900!!!! Well done labour!!!
If your scenario is so easy why are agents and landlords not putting rents up now?
er, because there isn’t a ban on fees now?
How do they get to publish these ‘facts’ based on such minimal data? If I advertised anything about my company in such a way then I’d be taken to task for it.
landlord and letting agent so if this lot get in I’m likely to be neither! Major step forward in housing people – not.
Clarky46, you will not be the only landlord/agent leaving.