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Shelter campaigns for letting agent fees to be abolished

Posted on 2013-07-02

Shelter is now campaigning to abolish all letting agent fees in England, which has already occurred in Scotland. These fees include letting agency fees charged to renters to set up a tenancy, including:

  • Administration fees
  • Holding fees
  • Credit check fees
  • Check-in fees

The charity is calling on politicians to end letting fees to renters, asking people to join its campaign and sign its online petition. The research found that two-thirds of people who have dealt with a letting agency in the last three years support an end to fees to renters to set up a new tenancy.

Debate on the issue of letting agencies has intensified in the past six months, with the Office of Fair Trading, Advertising Standards Authority, and Which? raising concerns about standards and fees, and The Property Ombudsman highlighting a 12% rise in complaints from landlords and tenants. A recent report by RICS, who represent some letting agencies, claimed that the industry has become a ‘Wild West’.

But, understandably, many letting agents are none too happy about this campaign. 

The Estate Agency Foundation, a charity funded by the estate agent industry to help the homeless, who has donated £20,000 to Shelter, has withdrawn support for Shelter over its position on letting agents charging fees to tenants. A statement on its website says: “Currently Estate Agency Foundation will make no further donations to Shelter but we will work together to try and find a resolution.”

The letting agent industry does seem to have some backing from a senior minister. Baroness Hanham, in the Lords, said;

“The Government does not support a blanket ban, as it would drive up the cost of rents”.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government said in full, “We welcome Shelter’s contribution to the debate. But remain unconvinced that increased regulation is the answer. So we do not support a blanket ban on fees to tenants, especially as this is likely to drive up the cost of rents.

However, it is agreed that we need to take action to drive up standards in the private rented sector. We are already changing the law to require all letting and managing agents to belong to an approved redress scheme which will give tenants an effective way to address complaints.

Whilst landlords and letting agents are free to set their own charges, they are prohibited from setting unfair terms or fees under existing consumer protection legislation. Where a consumer believes that agents are in breach of this legislation, it is open to them to draw this to the attention of their local trading standards officer".

Shelter’s campaign to get tenants' fees abolished has also come under fierce attack from the Residential Landlords Association. Although the campaign is aimed at letting agents, RLA chairman Alan Ward said it was anti-landlord because of the proposal that landlords should bear all the costs of setting up a tenancy.

As quoted in Letting Agent today he said: “Once again we have Shelter peddling the same anti-landlord rhetoric, seeking to place yet more costs on the shoulders of landlords. With almost 90% of landlords being either individuals or couples renting out just a few properties, Shelter seems to think that landlords have a bottomless pit of money to spend.

A similar scheme in Scotland has put many letting agents out of business, thereby reducing choice for tenants and landlords. Shelter’s campaign to impose on landlord’s excessive and unneeded red tape and costs will only serve to drive up rents for the very same tenants they try to serve.”

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