When Hannah moved home with her new baby, she had to borrow money to cover her rent and deposit. Then, just as she was preparing to move in, her letting agent explained that she’d need another to pay £240 in fees, ‘to cover the costs of administration.’ She had to go back to friends and family and ask for another loan.
Reanne was charged £475 in letting agent fees. She had to take out credit card debt to cover the costs. Michael was charged £150, and had to pay another £150 every year, when his contract came up for renewal. He’s now in his fourth year. Jason was asked to stump up £700 up front for “reference checks, credit checks and other admin”.
These are some of the experiences the people of Hackney have shared with us when we asked them about letting agent fees. The fees change, and so do the spurious reasons given for the charges, but the basic pattern is always the same; extortionate sums of money that we have no choice but to pay, because in a housing crisis, the threat of having nowhere to live is ever-present.
A government ban on letting agent fees?
We’ve been campaigning on letting agent fees for years, so when the government announced that it was proposing to ban letting agent fees we burst out the party poppers. But letting agents are doing everything in their power to make sure the ban on fees never happens.
It’s fairly obvious why agents stop the ban on fees. Having the power to charge limitless fees to desperate tenants has served them very well- and still does so! The letting agent industry has boomed in the last ten years . Every time you turn your back, another letting agent pops up.
To put it simply, letting agents are getting rich while we renters are getting ripped off.
What are letting agent fees?
Fees can include a set-up fee, fees for the preparation of a tenancy agreement, reference checks or guarantor checks, or for the amendment or renewal of a tenancy agreement. They vary widely from agency to agency, are not regulated by any third party, and are often poorly explained to renters.
According to the English Housing Survey, letting agents fees increased by 60 percent between 2009–10 and 2010–14, while a report by Shelter showed that one in seven private renters have paid more than £500 in fees. Andrew, who we spoke to in Stoke Newington, was asked to pay more than £900!
Why should we get rid of them?
Throughout the year, Digs has spoken to dozens of private renters around the borough about the fees they’ve paid: Not a single respondent to our survey has opposed the ban. Hackney residents are fed up. As one respondent told us, ‘I tend not to buy into the ‘such-and-such a group of people are bastards’ narrative, but letting agents get pretty damn close!’
Letting agents know that our need to find somewhere to live means we’ll pay whatever they demand, so long as we have savings we can dip into, or someone we can borrow from (etcetera, etc.).
For those that don’t have this option fees are a very real barrier to finding somewhere to live. People we spoke to have had to sleep on friends sofas, and in some circumstances, ended up sleeping rough, because they haven’t been able to raise the money to pay the fees they have been charged by letting agents.
A ban on fees-gouging by letting agents is a step in the right direction, but firstly we need to sort out the reasons why letting agents are able to force their fees in the first place. Simply, they have too much power.
In the long-term, we need a bottom-up transformation of renter rights and a serious system of rent controls. In the short-term, it requires that we to make sure the ban on fees goes ahead, and that it includes all fees, so greedy letting agents aren’t able to exploit loopholes.
How can we get rid of them?
Right now, trade associations for letting agents and landlords like the Association of Registered Letting Agents (ARLA) are lobbying against the ban on fees. Predictably their arguments why do not hold up.
Organisations like the Residential Landlords Association and the Association of Registered Letting Agents will try every trick in the book to stop the ban. Bans of such practices have been implemented before to great success. For instance it has been illegal for employment agencies to charge fees since 1973.
Private renters’ organisations like Digs need do all it can to make sure that the ban introduced rather than late 2018, but now. Now and not just as a means of introducing more competition into the rental sector, as is suggested by the Government consultation on banning letting agent fees that launched this April, but as a first step towards addressing the underlying causes of the housing crisis.
Join our action on Friday 19 May to tell letting agents that fees must go ahead
Come meet us at 10.30 a.m. outside Hackney Town Hall. From there we’ll travel to a prominent supporter of letting agent fees, for a celebration of renters’ power! You can RSVP on facebook here.
On twitter? Please tweet using the hashtags #DaylightRobbery and #KeysNotFees