Vicky Spratt | Deputy Editor | Wednesday, 1 February 2017

Renters Are Still Waiting For The Government To Finalise The Ban On Letting Fees

Renters Are Still Waiting For The Government To Finalise The Ban On Letting Fees

The Debrief: The Debrief discovers that the ban is needed now more than ever...

It’s now been over three months since chancellor, Phillip Hammond, announced that the government would ban letting agency fees for tenants in the Autumn Statement following The Debrief’s campaign Make Renting Fair.

Following Hammond’s announcement, the share price of Foxtons fell by 13 per cent, which gives you some idea of how lucrative unfair fees are for agencies at the expense of this country’s 4 million strong community of renters.

However, in the time that’s passed since the ban was announced tenants are still being charged fees every time they move. Letting agents, it seems, remain defiant and are maintaining that their fees are justified. Indeed, the industry’s representative body ARLA (Association of Residential Letting Agents) insist that a ban will have ‘practical implications’ for the rental market and drive up prices for tenants, despite there being no evidence whatsoever that this happened in Scotland. David Cox, managing director of ARLA, has repeatedly called the ban ‘draconian’.

The government has said that a consultation will take place to finalise the fee ban in March or April of this year. While renters across England wait for the legislation to be drawn up and come into effect, The Debrief has heard from a number of renters who are still being charged unfair fees. Jennifer, who is looking to move to Bristol, explained that she’s encountering fees which rack up as much as ‘£540 per person’. She explained, ‘I rang up and they said it was an admin fee, because it was so expensive to draw up a contract. I replied that I had worked as a Property admin for six months in central London, and knew that it was a saved doc, where there is a box in which you press a button, and it configures with the data about the tenant and property already on your system. Then you just quickly scan the six highlighted bits to make sure it transfigured properly. Which takes approximately 3 mins beginning to end.’ What happened next? ‘The agent hung up’ she told The Debrief.

Rose, who has recently moved, was asked to pay £150. She explained to The Debrief that for that amount she ‘received no support or help from the agency’. So what did she get? ‘There was no check in, no inventory, no deposit certificate. They wouldn’t return my calls but instead sent me random emails directed at other tenants [by accident] and a couple of automated texts pressuring me for my references. I wouldn’t mind if it wasn’t something I had paid for, but I had I had kind of hoped for better.’

Worse still, are reports of money being withheld from tenants who paid full fees for a service from an agency. Alyss moved out of the property she’d lived in for two years in October last year. Nearly four months on and she still doesn’t have her deposit back in her back account. Stories like hers emphasise the necessity of regulating lettings agency fees. ‘I’ve spent the past three months on the phone to my agency’ she tells The Debrief, ‘only to be told they were getting quotes for “cleaning the oven” and “repairing the bath”. I knew this was a lie as we had cleaned the oven to the same standard it was left to us, and there was absolutely nothing wrong with the bath. I was also told someone had already moved into the property – so evidently the issues weren’t large and we should have had our deposit back.’

How has Alyss left things with her former agent? ‘I’ve finally had to take this up with the DPS’ she says, ‘it was, and still is, an absolute nightmare, and this whole situation is not only causing me financial stress, it’s taking time out of my work day to resolve.’

The Debrief called three lettings agencies across the country to ask them where they stand on fees as the proposed ban approaches. An agency from Manchester explained that they were still charging fees because ‘a lot of work is involved on behalf of tenants preparing a tenancy’ and that until the ban is in effect they have no intention of changing their stance. When asked whether they could provide an exact breakdown of what their fees covered, they could not.

In Liverpool another agency, who promise Landlords that they will get ‘the highest rent possible’ on their website, confirmed that they are still charging ‘tenancy admin fees’ and could not give a breakdown of what their fee of £199 actually covered. A London agency also confirmed that they were still charging an admin fee, per person of £180, and an inventory fee of £156 on a two-bedroom property. They could also not give a breakdown of what these fees covered. The London agent who spoke with The Debrief confirmed that there were still charging fees and would do until the ban was in place.

As the law currently stands, according to Section 83 of the Consumer Rights Act 2015, agencies should not be charging any ‘surcharges or hidden fees’ which has certainly been the case for Alyss. The law also states that there should be no duplication of charges between tenants and landlords – although it is acceptable to split charges between those parties, provided this is clearly explained in relation to the total cost of the specific service’, despite this none of the agencies, selected by The Debrief at random, could provide specifics on what exactly was and wasn’t covered by their generic ‘admin’ and ‘inventory’ fees.

If agencies are already breaching the Consumer Rights Act as it stands, it’s clear that a ban on letting fees is needed now more than ever to protect tenants.

Baroness Olly Grender, who worked closely with The Debrief on Make Renting Fair, emphasised the importance of pursuing the fee ban and making sure it’s terms are rigorous earlier this month in the House of Lords. She continues to hold the government to account on this issue. Speaking to The Debrief she said:

‘The ban on letting fees is a huge achievement by all who campaigned so hard to get it, but the devil could be in the detail and there is still work to be done. The important thing is that it includes all types of fees – including renewal and exit fees, as well as upfront costs. If it’s not comprehensive, then agents will find ways of getting round it, and tenants will continue to be ripped off. It must also be brought in as soon as possible and not kicked into the long grass.’

Far from being 'draconian' this ban is long overdue and necessary.

Share your letting fees stories with @thedebrief on Twitter, Facebook and Instagram using the hashtag #makerentingfair

You might also be interested in:

Letting Agency Fees Have Been Banned!

Why We're Calling For The End Of Letting Fees

The Reality Of Trying To Rent In London

Follow Vicky on Twitter @Victoria_Spratt

Tags: Money worries, Housing Woes