It claims that on average tenants are being charged £350 for everything from fees to set up a tenancy, administration fees, holding fees, credit check fees and check-in fees, but the total can rise to as much as £700.
These charges made to tenants are on top of the fees charged by a letting agent to landlords to rent out the property in the first place.
Although agencies are contracted by landlords, it has become routine for them to charge renters for elements of the service.
The Office of Fair Trading (OFT) recently analysed 4,000 complaints made by tenants and landlords to Consumer Direct about the lettings market and found that nearly a third were related to fees and charges.
The OFT found that landlords and tenants are being “drip-fed” extra charges when they have already signed a contract, making it harder for them to switch to another agent without racking up extra costs.
The Royal Institute of Chartered Surveyors, RICS, has likened the letting sector to the “the property industry’s Wild West”.
The chief executive of Shelter, Campbell Robb, said: “This shocking research reveals that letting agency fees have now become truly out of control. When renters have to find hundreds of pounds in fees each time they move, on top of deposits and rent in advance, it’s not surprising that fees are causing real financial hardship, and in some cases preventing people from moving at all.”
William Pascall, 61, found a house in Gloucestershire that he wanted to rent with his wife, Jane, last October, but the deal fell through when he refused to pay the letting agency’s fees, which totalled £588.
Housing minister Mark Prisk said: “While most letting agents offer a good service, clearly some of the practices highlighted in this report are a cause for concern. 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.”
Mr Prisk said that anyone who believes they have been charged unfairly should contact their local trading standards officer.
At The Online Letting Agents, we are very up front about our fees made to tenants. The reason for this is, a, because that is the ethical thing to do and b, our fees are reasonable, and there is no need for us to try to hood wink tenants or landlords.