Do letting agents' fees really add up?

From extortionate admin charges to reference check fees, tenants are being ripped off.

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Agency fees — two words guaranteed to make any prospective tenant shudder. They come in countless guises, such as a non-returnable holding deposit, deposit administration charge, administration fee, reference check fee... the list goes on. 

They are non-refundable, add hundreds of pounds to the cost of moving and no tenant really seems to know what they’re for. But we pay them because, well, because we have to. 

For letting agents, these fees seem to be big business. Figures from the Association of Residential Letting Agents (ARLA) show that the average fee for central London is £239. 
But perhaps more revealing is research by Citizens Advice Bureau that illustrates the huge disparity in agency fees, supporting the argument that some agents appear to be profiting from the charges. 

The survey, carried out in the capital over February and March, found that credit references are charged at anything between £21 and £300, admin fees at £50 to £420 and renewal fees between £20 and £250. 

These are on top of the deposit, which is usually the equivalent of six weeks’ rent, plus a month’s rent in advance as well as other moving costs.


To move into my current flat, a  one-bedroom property in Herne Hill, my boyfriend and I were charged £474 in fees — £180 per person admin fee and a £114 check-in inventory fee — probably the most I’ve ever paid. 

A friend recently forked out £600-plus for a three-bedroom flat, while many say they are charged about £100 a year to renew their tenancy. 

The Property Ombudsman says there is no legislation controlling agency fees, except that agents are required to disclose all “non-optional fees” with the rental figure as early in the process as possible. 

Agents can charge for changing a name on a tenancy or for having a guarantor. According to campaign group Generation Rent, one agency even charges an additional £60 for the luxury of moving in on a Saturday. 

Labour and the Greens have promised to scrap agency fees, which is likely to prove popular with the capital’s 2.2 million private sector tenants, but not among agents who claim if fees were banned, the costs would simply be added to the rent.

ARLA claims tenant fees are needed to cover the cost of essential items during the letting agreement process, such as reference checks. 

Its managing director David Cox says if they were banned outright, letting agents “may try to recuperate the costs elsewhere, most likely by increasing the cost of rent for tenants”. 

Richard Lambert, CEO of the National Landlords Association, agrees, saying there are legitimate business costs in finding and placing a tenant and that it is fair for agents to charge for their time and expertise. 

Personally, I think tenants should be paid the fee because it’s usually us who do the legwork. 

I’ve had to correct paperwork,  had reference-checking agencies employed by letting agents pass my details to home insurance companies and once had an agent light up a cigarette while driving me to a property. Not exactly professional. 

If they could at least give good services for their fees, perhaps we wouldn’t feel quite so ripped off, rather than doing the bare minimum, or even less, at a premium cost.

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