Tenants could benefit from a double dose of good news after the House of Lords voted in favour of regulating the lettings industry, and an advertising ruling means agents have to be up-front about their fees.
In the Lords, peers supported regulating the industry, via an amendment to the Enterprise and Regulatory Reform Bill which would force letting agents to sign up to a compensation scheme for landlords or tenants who felt they had been cheated. That could mean both landlords and tenants are one stage closer to escaping the damage of dodgy agents: unlike estate agents, lettings agents are currently entirely un-regulated, and 40% of agents are not registered with the Property Ombudsman or affiliated to a professional body.
Yet Britain’s rental sector is fast growing, accounting for 4.7 million households in the UK, and two-thirds of all private tenancies involve an agent. Londoners will be particularly impacted, as the capital accounts for a fifth of the country’s £1 billion-a-year lettings market. The bill to regulate the industry will now return to the House of Commons for debate.
But in the short term, a ruling by the Advertising Standards Authority that has just come into force means that letting agents have to list on adverts any compulsory fees they are charging when renting a property.
The ASA ruled that estate agency Your-move.co.uk had failed to make clear that an administration fee would be added to the quoted price. From now on, even if rental fees cannot be calculated in advance because they rely on the property’s letting cost or an individual’s circumstances, agents still have to make clear that additional charges will be added, the ASA said.
Research by consumer group Which? found the average cost for mandatory administration and reference fees by rental agents was £310, with some charging as much as £420. Some tenants were also hit with check-in fees and compulsory cleaning charges, bringing the total closer to £600.
Which? sent mystery shoppers posing as potential tenants to four different London branches of each of Foxtons, Barnard Marcus, Martin & Co and Your Move, and discovered none of the agents provided information about fees in property listings on their website, on property site Rightmove, or after tenants had registered online.
Richard Lloyd from Which? said: “Renting is now the only housing option for millions. It is vital letting agents are upfront about expensive fees in advance. Despite its dramatic growth, there is also an alarming lack of consumer protection in the rental sector. Tenants deserve much better.”
