Which? Is arguing that charging tenants admin fees, as well as landlords, is a “rip off” and should be banned. This would follow the practice in Scotland where there fees were banned over a year ago.
The respected consumer magazine featured its “10 fees that should be banned” story 19 June 2016, claiming that these fees among others should be banned.
Which? Claims that, “Letting agents charge several ‘admin fees’ to cover costs, such as drawing up a tenancy agreement, inventories and checking references. This can be as much as £500 (or £300 outside London) per property.
“Given that landlords generally pay admin fees too, and that a comprehensive tenant check by a credit reference agency such as Experian costs only £30, it’s hard not to assume that some firms are simply profiteering.
“We say: These fees transfer costs to tenants. Landlords already pay letting agents and can recoup this expense in the rent they charge.
“Some add-on charges are avoidable, but only if you know what to watch out for and are prepared to shop around.”
Despite the ban on agency fees for tenants in Scotland, it’s not been all plain sailing. According to the homelessness charity Shelter, some letting agents across Scotland are making illegal charges to prospective tenants who don’t know about the change in the law.
Tenants taking part in a Shelter survey were often unaware they did not have to pay these admin charges.
The law in Scotland now prohibits prospective tenants being charged fees on top of their deposit and rent in advance, whereas in England there is only a requirement for agents to prominently display their scale of fees and explain what they are for.
Shelter said most letting agents surveyed in Scotland now charged a pre-tenancy “premium”, in some cases up to £180.
“This is rip-off Scotland,” Shelter Scotland director Graeme Brown told BBC Scotland.
“Just at a time when people are desperately trying to find a house and families are trying to build a home – and we know how difficult it is to get a house – people are being forced to find even more money.
“This is an illegal action being taken by letting agents.”
Which? Magazine says end tenant letting fees https://t.co/23ktj7K4nu
— LandlordZONE (@LandlordZONE) June 27, 2016