Lettings agents’ fees soar in booming market

| December 8, 2011 | 0 Comments
Lettings agents’ fees soar in booming market

Difficulty in securing mortgage finance and a slump in house sales is bumping up demand in the market for rented accommodation, but a new report warns that lettings agents’ fees are also soaring.

Tenants may have to pay £2,000 upfront to move house according to independent thinktank the Resolution Foundation.

As well as a deposit and rent in advance, a range of other fees are being charged including administration, deposit administration, credit reference, check in and check out, and tenancy renewal fees.

These fees are often not advertised in advance, leaving tenants having to pay significantly more than they anticipated.

Prospective tenants in London are particularly badly-affected by high fees and in its ‘Renting In The Dark’ report, Resolution Foundation suggests that total upfront costs to rent a one-bed property in London could amount to nearly £2,200.

In contrast, the fees to rent a similar property in Gloucester would be around £1,100.

The Resolution Foundation is calling for the private rental market to be more tightly regulated, bringing it up to the same standard as estate agents.

Vidhya Alakeson, the foundation’s director of research, said: “We need more transparency so tenants at least know what fees they are facing and to help create a more competitive market”.

The foundation also wants lettings agents to be required to sign up to an ombudsman service in order to protect tenants.

Christopher Hamer, The Property Ombudsman, said: “The Government does not see regulation of the sector as a priority and I, therefore, welcome the recommendation of this report that all letting agents should be required to be registered with an ombudsman scheme so that, at least, landlords or tenants can gain redress where they have been disadvantaged by an agent.”

According to the latest residential lettings survey from the Royal Institution of Chartered Surveyors (Rics), rents rose for the seventh consecutive quarter in the three months to October, with rents in London increasing at the fastest pace.

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