According to leading homeless charity Shelter, letting agents fees are now ‘out of control’. Having recently carried out a mystery shopping exercise, Shelter spoke with a total of 58 letting agents across England and found great differences in the levels of transparency surrounding tenant application fees. The fees typically cover the costs associated with referencing, credit checks and deposit registration.
A number of letting agents were found to be unclear over the total fees involved at the outset of an application to rent a property whilst others introduced fees later in the process. It was discovered that such practices often result in tenants having to find additional money at short notice and in the worst cases having to cancel their application as a result of not being able to raise funds with no route for a refund of fees paid to date. Large differences were also found in the level of fees charged with tenant fees ranging from as little as £150.00 in smaller towns to as much as £400.00 in the capital, London.
The UK Government has recently agreed new regulations to govern the way in which agents market properties. In future it will be mandatory for agents to include a note on all marketing to set out where application fees are applicable on all properties that are marketed to the general public. It is hoped that by doing so the public will be able to make an informed decision over whether or not to proceed with a viewing.
Opinions are split over how the new regulations will be met by agents with some saying that it will be sufficient for leading property advertising websites such as Rightmove.co.uk and Zoopla.co.uk to carry a standard footnote on all property listings detailing that fees may be applicable when making an application to rent whereas others say that this practice will be insufficient as full transparency will remain impossible unless the customer makes a telephone call to the agents office. The new letting fee advertising regulations will first come into effect 01 November 2013 and will be monitored by the Advertising Standard’s Authority. The guidance notes for this area can be found here.
With as many as 130 letting agents in Nottingham it will be interesting to see just how the regulations will be met by the different firms. It is our view that those agents that have nothing to hide will offer full transparency when dealing with both tenants and landlords and in doing so will build better relationships with both new and existing customers.
More advice surrounding the new regulations can be found on the Committee of Advertising Practice website here