Quarter of people feel 'ripped off' by letting agents' charges says Shelter research

Almost a quarter of people feel they have been “ripped off” at some point in their lives by letting agents' charges, research from Shelter has found.

Around 23% of more than 5,000 people surveyed believed they had been landed with unfairly high fees for aspects of renting in England such as credit checks, renewing contracts and "administration".

More than half (52%) of people who felt they had been ripped off or knew someone who had said this was due to fees being "out of proportion" to the true cost of the work done.

The housing charity said it had found cases of renters being charged more than £150 for repeat credit checks every year, which Shelter said actually cost between £8 and £25 to perform.

It said some people were being charged £100 just to view a property and renters were being charged up to £540 in non-refundable "administration" fees.

Shelter also said it believes some landlords are being unfairly charged by letting agents. It said it also found some letting agents had been double-charging landlords and tenants for the same services.

People living in London, which has seen particularly fierce competition in the rental sector among tenants, were the most likely to believe they have been charged over the odds, with almost one in three (29%) of people saying this.

Kay Boycott, director of campaigns, policy and communications at Shelter, said: "It's scandalous that some letting agents are creaming off huge profits from the boom in private renting by charging both tenants and landlords fees that are totally out of proportion to the service they provide.

"With our investigation uncovering unexplained charges of over £500, we need to make sure that letting agent fees are reasonable.

"With costs like these, on top of the sky-high rents that families already face, it's no surprise that many dread the day they have to look for a new place to rent."

Rents have soared to new highs over the last year amid strong demand from tenants who have found themselves trapped in the rental sector.

Would-be home buyers have struggled to get on the property ladder, as lenders have toughened their borrowing criteria amid the weak economy and the number of low-deposit mortgages available has shrunk back.

The study questioned people about their experiences of renting over their lives and so includes a cross-section of the population, not just people who are currently tenants.

Here are the top three fees affecting people who feel they have been ripped off by letting agents according to Shelter and the proportion of people affected:

1. "Administration" fees, 14%

2.Credit check fees, 10%

3.Fees for renewing a contract, 8%

Here are the top three reasons why people thought fees were unfair:

1.The fee was disproportionate to the cost or amount of work done by the letting agent, 52%

2.The fee was unexpected, 17%

3.The fee did not reflect the level of customer service I received, 10%

Here is a regional breakdown of the proportion of people who said they had been charged unfair fees by letting agents:

:: North East, 16%

:: North West, 23%

:: Yorkshire and the Humber, 22%

:: East Midlands, 25%

:: West Midlands, 25%

:: East of England, 26%

:: London, 29%

:: South East, 24%

:: South West, 28%

Jane Ingram, president of the Association of Residential Lettings Agents (ARLA), said: "Standards in the lettings industry do need to be raised. That's why we have long called on the Government to act swiftly and introduce a robust licensing system designed to protect consumers.

"ARLA has already taken steps to help inform and protect consumers by setting up our own member licensing system to guard against bad practice, and all of our members are required be clear and transparent with tenants of any charges that they will incur.

"It is important to bear in mind that a professional lettings service cannot be provided to either a landlord or a tenant for no cost. However, both parties should be aware of their costs and feel that they have had a professional service, and should have somewhere to seek redress if they feel otherwise."