It means that landlords and agents will not be able to ask tenants for anything more in advance than rent and refundable deposits.
Scottish housing minister Keith Brown has confirmed that other fees should not be charged and said that the Rent (Scotland) Act 1984 will be clarified to become unequivocal on the matter.
The move means that agents and landlords who, for example, currently charge tenants for inventories and credit checks, will no longer be able to do so.
The concern is that with agents no longer able to charge tenants for such services, they will be upping their management fees to landlords – who will be passing the increased costs to tenants in the form of raised rents.
While this move has been played out north of the border, it is being seen by letting agents as a worrying precedent for the rest of the UK. Landlords, however, might be more ambivalent.
The Scottish development followed a vociferous campaign by Shelter to ban any and all tenant fees, and Shelter has now launched a campaign in England about letting agents’ fees.
It claims that a large number of tenants and landlords feel ripped off by the fees.
The organisation said the results of a YouGov survey into letting agents’ fees found that 23 per cent – equivalent to 11 million people – felt they had been ripped off by letting agents in England.
The fee most people said they had been unfairly charged for was for ‘administration’ (14 per cent of people affected), followed by fees charged for credit checks (10 per cent) and renewal fees (eight per cent).
The latest survey, said Shelter, forms part of its investigation into ‘the unfair fees charged by letting agents’, suggesting it is not going to let up on its efforts.
It said that shocking cases it had uncovered included tenants being charged £150 for repeat annual credit checks, which cost the agent between £8 and £25; tenants being charged £100 per viewing and up to £540 in non-refundable admin fees; and agents double-charging fees for the same service to both landlords and tenants.
Over half (52 per cent) who said they have been unfairly charged by a letting agent felt the fees were unfair because they were out of proportion to the cost or the amount of work done.
One tenant, Angelique Atkinson, a renter from Hampshire, paid £540 in administration costs when she rented a home with her partner.
She said:
“We didn’t receive any justification for these extortionate fees, and ended up having to pay nearly £3,000 upfront, making a huge dent in our finances. I have nowhere I can complain to and be taken seriously. We can’t afford to buy our own home and renting is so expensive that it seems impossible to save for a deposit. The rental market is a horrible place right now.”
Abdul Motin, a landlord from London, said:
“A letting agent who was supposed to be renting out my home has ripped me off for £9,000 and we’re now struggling to meet the mortgage. The letting agents falsified the tenants’ references, withheld the rent and deposit from me, and have now dissolved their company. This is the only property I own and I’ll never rent it out again. This has been a living nightmare for me and my family.”
Kay Boycott, director of campaigns, policy and communications at Shelter, said:
“It’s scandalous that some letting agents are creaming off huge profits from the boom in private renting by charging both tenants and landlords fees that are totally out of proportion to the service they provide.
With our investigation uncovering unexplained charges of over £500, we need to make sure that letting agent fees are reasonable. With costs like these, on top of the sky-high rents that families already face, it’s no surprise that many dread the day they have to look for a new place to rent.”
Alan Ward, RLA chairman, said,
“Sadly, the results of this survey come as no surprise, and it supports the RLA’s view that letting agents should be regulated. The examples of poor practice highlighted by Shelter give the private rented sector a bad name, and undermine the excellent work of good agents and landlords.
In the absence of a compulsory regulatory system, I would urge all landlords and prospective tenants to only use agents that are members of the Association of Residential Letting Agents (ARLA) or the National Approved Letting Scheme (NALS), and who carry the SAFEagent logo. Such agents will provide prospective tenants with a client money protection scheme and a customer complaints procedure offering independent redress.”
