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Letting agents must be upfront about hidden fees and charges, say MPs Letting agents must be upfront about hidden fees and charges, say MPs
(2 months later)
The campaign against "rip off" charges levied by leading high street letting agents has won the backing of MPs who demanded the government end the practice of hidden fees which can cost tenants hundreds of pounds.The campaign against "rip off" charges levied by leading high street letting agents has won the backing of MPs who demanded the government end the practice of hidden fees which can cost tenants hundreds of pounds.
The Commons select committee on communities and local government accused leading agents of failing to tell tenants upfront about extra costs beyond deposits and rent. Tenants have reported having to pay more than £500 in various fees to secure a privately let home. Foxtons charges a £420 "administration fee", £210 to change a tenant's name on the contract and £96 to renew terms. The practices have triggered protests outside agents' offices in areas where large numbers of residents rely on the rental sector because they cannot afford to buy.The Commons select committee on communities and local government accused leading agents of failing to tell tenants upfront about extra costs beyond deposits and rent. Tenants have reported having to pay more than £500 in various fees to secure a privately let home. Foxtons charges a £420 "administration fee", £210 to change a tenant's name on the contract and £96 to renew terms. The practices have triggered protests outside agents' offices in areas where large numbers of residents rely on the rental sector because they cannot afford to buy.
"Unreasonable fees and opaque charges are not confined to a few rogue agents," said Clive Betts, chairman of the committee. "Many well-known high street agents are just as guilty. Agents must make tenants aware from the outset of the fees they intend to charge. All property listings–on websites, in print or in agents' windows–must be accompanied by a full breakdown of fees.""Unreasonable fees and opaque charges are not confined to a few rogue agents," said Clive Betts, chairman of the committee. "Many well-known high street agents are just as guilty. Agents must make tenants aware from the outset of the fees they intend to charge. All property listings–on websites, in print or in agents' windows–must be accompanied by a full breakdown of fees."
Betts said it was amazing letting agents are subject to less control than estate agents.Betts said it was amazing letting agents are subject to less control than estate agents.
"'Cowboy' agents who rip off landlords and tenants have to be stopped," he said. "They need to play by new rules or get out of the sector.""'Cowboy' agents who rip off landlords and tenants have to be stopped," he said. "They need to play by new rules or get out of the sector."
Information on fees should not be "small print", but be immediately obvious to potential tenants and agents must explain their charges to tenants before showing them around any property. If agents do not meet these requirements, the fees should be illegal, the MPs said.Information on fees should not be "small print", but be immediately obvious to potential tenants and agents must explain their charges to tenants before showing them around any property. If agents do not meet these requirements, the fees should be illegal, the MPs said.
Caroline Kenny, executive at the Association of Letting Agents, said not all fees could practically be displayed on adverts because they are variable.Caroline Kenny, executive at the Association of Letting Agents, said not all fees could practically be displayed on adverts because they are variable.
"No two properties or households are the same, which makes it very difficult to operate a business according to standard 'book prices'," she said."No two properties or households are the same, which makes it very difficult to operate a business according to standard 'book prices'," she said.
On Wednesday night the government stood firm, with the housing minister Mark Prisk saying it would not further regulate letting agents.On Wednesday night the government stood firm, with the housing minister Mark Prisk saying it would not further regulate letting agents.
"We're determined to build a bigger and better private rented sector that gives tenants more choice but we should avoid excessive regulation on the sector which would push up rents and reduce choice for tenants," Prisk said. He added that the government will require letting agents to join a redress scheme for unsatisfied tenants and landlords."We're determined to build a bigger and better private rented sector that gives tenants more choice but we should avoid excessive regulation on the sector which would push up rents and reduce choice for tenants," Prisk said. He added that the government will require letting agents to join a redress scheme for unsatisfied tenants and landlords.
The report stops short of calling for a total ban on the fees which is supported by the former housing minister John Healey and former Tory minister Peter Bottomley in a private members bill which will have its second reading in the autumn.The report stops short of calling for a total ban on the fees which is supported by the former housing minister John Healey and former Tory minister Peter Bottomley in a private members bill which will have its second reading in the autumn.
Heather Kennedy, a spokeswoman for renters campaign group Digs, said the MPs had not gone far enough.Heather Kennedy, a spokeswoman for renters campaign group Digs, said the MPs had not gone far enough.
"Making fees transparent won't stop letting agents charge whatever they like, especially seeing as rip off fees are now the norm rather than the exception," she said. "The reality is many people simply can't afford these fees on top of the deposit and rent in advance … The government should follow Scotland by making letting agents fees illegal.""Making fees transparent won't stop letting agents charge whatever they like, especially seeing as rip off fees are now the norm rather than the exception," she said. "The reality is many people simply can't afford these fees on top of the deposit and rent in advance … The government should follow Scotland by making letting agents fees illegal."
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