City councillors are considering setting up their own letting agency because they claim private firms are ripping off tenants and landlords.
Cambridge City Council unanimously voted in favour of taking the idea further.
Proposing the agency idea, Councillor George Owers explained letting agents had too much power in the city’s housing market and accused many of exploiting their control to “extort as much money as they possibly can in hidden fees and charges”.
“All Cambridge renters deserve the option of a social letting agent that will not profiteer and will prevent people having to put up with the scourge of all these fees and inappropriate practices,” he said.
Owers also argued the city’s letting agents charged ‘huge’ fees for credit and reference checks that were relatively cheap and only took a few minutes to carry out.
Councillor Peter Roberts agreed many lettings agents acted responsibly, but branded those who did not as “absolute rotters”.
The city is one of several councils either running letting agencies or looking at the idea.
Hackney Council, East London, is running a pilot not-for-profit agency which is asking landlords to hand their properties to the council in return for a guaranteed rent, even in void periods.
The council is not charging any agency fees to tenants for setting up tenancies or referencing, which saves the renters hundreds of pounds on the cost of taking up a buy to let home.
In return for managing the property and providing tenants, the council wants landlords to pass accreditation courses and maintain their buy to let homes to a good standard.
Councillor Karen Alcock, Hackney’s cabinet member for property and housing policy, said: “Hackney is a place where some rents are going up considerably and what the council is trying to do is to find different levels of affordability for people.
“Rather than going to agencies and the property going to the highest bidder, we’re working on longer tenancies, we’re trying to create a more stable rental market for those who can’t afford to rent but earn too much to get a council house.”
Property Bay, a letting agency operated by Neath Port Talbot Council has run for some years, while councils in Liverpool and other cities are looking at proposals to offer the service as well.