Letting Fees To Be Abolished

It was a small item in a Metro daily some years ago that alerted me to what I thought would be the next Shelter/CAB campaign. Complaints had been made about the very high level of letting, or Administration fees, that agents were charging, which some reported could amount to several hundred pounds.


I may have been wrong about Shelter and CAB pushing for the abolition of letting fees, because it has not been discussed in any depth in the media, although there may have been movements behind the scenes, but the Government are now considering doing exactly that – abolishing letting fees altogether.

For the prospective tenant, expected to pay one months’ rent in advance, plus a months’ deposit, this must seem like good news. There has, as expected, been some opposition from Agents, who argue that the costs associated with creating a new tenancy are necessary and will therefore be passed over to the tenant. I think many tenants will feel it is preferable to have less costs when they start a tenancy, whereas many agents will feel the loss of a non-returnable administration fee, which requires no protection (as deposits must) and is theirs to do what they like with.

Administration fees are a concern, and particularly in this day and age, with almost instant access to new tenancy agreements by downloading from their document files, at very little cost. Without a doubt, some agents charged totally unreasonable letting fees. Accreditation schemes, landlord associations, and websites such as this one can provide tenancy agreements, inventory forms, even cut-price referencing services are available from some. 

The gas certificate is a mandatory requirement, but surely should be an expense for the landlord? ‘How to Rent’ can also be downloaded, as needed. Where is the justification for fees of £400-500? 

As it so often seems however, when legislation is introduced, a very big hammer is used to crack a not very large nut. It would seem more sensible to set a limit on what fees can be charged, by ordering that all agents must show the fees – and be accountable for them. Why does it cost £200 for a tenant to be credit referenced, when there are companies which will do this for £20? Why does a tenancy agreement cost over £100, when agents will use a standard format? No agent surely would tailor-make a tenancy agreement for every tenant? Why does it cost £150 to renew a tenancy agreement?

What could seem acceptable when every document had to be produced individually, when heavy documents had to be sent by post, cannot apply today, when electronic communication has made the day to day business of letting so easy.

As always, it will be those agents that have behaved in a reasonable and fair manner to tenants, will be the ones stung. They will be stopped from taking a small fee, to hold the property, to pay the reasonable credit reference charges mentioned above and the other incidentals that could be included. I would hazard a guess that these would be the smaller agents, not the huge agents with countless branches.

And the other losers? The tenants, of course, who will find that rents have increased to compensate for the lack of an administration fee without any prospect of that being reduced if they live in the property for longer than it has taken to accumulate the equivalent fee. This hammer may crack a nut, but it could very well cut down the tree, as well.

For advice on buy to let issues – Ask Sharon

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