Housing charity Shelter wants landlords to pay the costs of setting up tenancies through letting agents instead of tenants.
Renters are paying an average £350 in fees to letting agents on top of rent and a deposit when they sign a private tenancy agreement.
The fees are so high that many are forced into debt or to scrimp on food and other bills to put a roof over their heads, Shelter alleges.
A mystery shopper exercise by the charity involving 58 letting agencies across England and Wales revealed a third of letting agents charge more than £400 to let a home, while seven asked for 3700 or more.
Shelter claims that some of these fees are demanded upfront and are not repaid to renters if the tenancy fails to go ahead.
In other research, Shelter also revealed:
- 25% of prospective tenants have to borrow money to pay letting agent fees in the past three years
- 16% claimed letting agent fees had prevented them from letting a home
Now, Shelter has started a campaign to lobby politicians to scrap letting agency fees charged to renters to set up a tenancy, including ‘administration’ fees, holding fees, credit check fees and check-in fees.
The charity also wants landlords to pay the costs of setting up tenancies as they choose who acts as a letting agent for them, which sets the fees charged to tenants.
Shelter chief executive Campbell Robb said: “This shocking research reveals that letting agency fees are out of control. When renters have to find hundreds of pounds in fees each time they move – on top of deposits and rent in advance – it’s not surprising that fees are causing real financial hardship, and in some cases preventing people from moving at all.
“Anyone who’s tried to find a rented home in the past few years knows that affordable, decent places to live are in short supply, and often snapped up within hours. The high demand for rented homes means that renters can’t shop around, but instead have to deal with the letting agency their landlord has chosen: they have no choice but to swallow their anger and stump up their cash.”