Top Letting Agents Slammed For Hiding Fees

In February 2013, the consumer group Which? carried out a number of mystery shopping tests on some of the major letting agents in London.

Mystery shoppers who posed as potential tenants visited four different London branches of Foxtons, Barnard Marcus, Martin & Co and Your Move.  Their findings were that the fees that tenants would be asked to pay were not disclosed early enough. They found that tenants faced unexpected charges, couldn’t compare prices accurately, and could sometimes find themselves signing up for something and discovering too late the total fees involved.

An overview of the research showed:

None of the agents provided information about any fees in any property listings on their website, rightmove or after tenants had registered online

Only one tenant (at a Foxton’s branch) was freely given information about fees when they registered in a branch or called to arrange a viewing.

No tenant was given a written schedule of charges

Some tenants were not given fee information, even when they specifically asked, or were not given the complete details.

Which? believes that by failing to disclose fees upfront or during their first contact with a customer, letting agents are breaching consumer law by not providing material information in a manner that is clear and timely. We have written to the companies to share our findings, demand improvements, and remind them of their legal responsibilities under the Consumer Protection from Unfair Trading Regulations (CPRs).

Executive director at Which?, Richard Lloyd said: “Renting is now the only housing option for millions, and with many households struggling to pay rent and bills, it is vital that letting agents are upfront about expensive fees in advance. People should know all the costs before they invest time and effort in viewings. Drip feeding fees is unfair and a major barrier to people comparing agents and properties.  Despite its dramatic growth, there is also an alarming lack of consumer protection and redress in the rental sector. Tenants deserve much better.”

To improve the letting market for consumers, Which? is calling for:

· An end to hidden fees – information about the fees tenants can expect to pay must be provided up-front, in adverts, on websites or at the first point of contact with an agent, so that people know what they are signing up to and more easily shop around.

· Increased consumer protection and redress – renters must be given the same legal protections as people buying and selling property and letting agents should be covered by the same legislation as estate agents.

Which? supports an amendment to the Enterprise and Regulatory Reform Bill, expected to be debated in the House of Lords on 6 March 2013, which would require all letting agents to sign up to a redress scheme, as well as giving the Office of Fair Trading the power to ban lettings agents that break the rules.

Our research found that the average cost for mandatory administration and referencing fees across all agents was £310 for a 1 bed flat with 1 adult, and the highest was £420. Some tenants could also face check-in and check-out fees, bringing the total closer to £600.

As well as high and unexpected fees, previous research from Which? found widespread poor practice among some letting agents, dissatisfied tenants and poor consumer protection. The report also estimated that tenants are paying around £175 million in agent fees annually, and that not being able to shop around could be costing them as much as £76 million.

The private rented sector accounts for 4.7 million UK households with two-thirds of all private tenancies involving an agent. London accounts for around 20% of the total UK lettings market, which the Property Ombudsman estimates to be worth around £1 billion annually.

Source: Which?

Sorry, comments are closed for this post.