15 June 2016

Estate agency fees could soon be scrapped for renters

If you’ve ever rented a house, you’ll know how expensive estate agent fees can be. Soon, we could see a bill passed that means these pesky fees are banned!
row_of_housesIf you’ve ever rented a flat in the UK, we imagine you’re probably familiar with the pain of ridiculously high estate agent fees.

Sometimes, agencies will ask you to cough up the first month’s rent in advance, a hefty deposit (read this guide to ensure you get this deposit back in full when you move out) and then whatever the estate agents feel like charging you as their ‘fee’.

These fees currently aren’t regulated and so can vary dramatically – you could be charged anything from £25, or even £1,500!

Last week, Lib Dem Peer, Baroness Olly Grender, spoke in the House of Lords about proposing the introduction of a Renters’ Rights Bill which would include the scrapping of letting agency fees for renters in England, Wales and Northern Ireland.

A ban on these fees was already introduced in Scotland in 2012, and Lady Grender thinks it’s time that any UK renter be protected from these elaborate fees.

Did you know that the biggest student rental strike the UK has ever seen is happening right now in London? We have the lowdown!

The Renters’ Rights Bill

royal assent

Baroness Grender’s is proposes four main changes:

  1. Allow tenants to have access to a database of ‘rogue’ landlords and estate agents, so they know who to avoid when searching for a new flat. Local housing authorities already have access to this database, so Lady Grender suggests it’s only fair that tenants are allowed access to it too so they can avoid being ripped off. 
  2. Scrap agency fees for tenants. This will mean that estate agents won’t be able to charge tenants fees for admin, registration, inventory checks, reference checks, tenancy renewals and exit fees. Any fees incurred should instead be covered by landlords, which will prevent agencies from making up charges as they go along for things like photocopying and ‘check-out’ charges.
  3. Mandatory safety checks. There must be a safety check at least every five years to ensure renters are living in a safe environment. Makes sense!
  4. Prevent dodgy landlords from renting HMOs. House in Multiple Occupation (HMO) are privately let properties with tenants living there from two or more different families (so most commonly the case with student digs). The Bill proposes that any ‘criminal’ landlords should be banned from being able to have an HMO licence.

When will the Bill be passed?

At this stage, it’s not just a matter of when but if the Bill will pass through the House of Commons.

At the moment, the Renters’ Rights Bill is about to enter its third stage (that’s the ‘C’ stage in the bottom ‘House of Lords’ box in the diagram above) so it still has a few stages to fight through before it can officially be made into a law.

So, in other words, making a new law is a long, confusing process. It could take a while before both Houses agree – the Bill may be changed significantly (some are proposing a cap on fees rather than a complete ban) but it is also possible that the Bill may not pass at all.

 Why tenants need more rights

lenny housing rent

Currently, tenants aren’t very well protected from money-grabbing estate agents. As Olly Grender said when she addressed the House of Lords of Friday:

[Tenants] have more consumer rights when they buy a white good, such as a fridge, than they do when they rent the home to put the fridge in.

The law protects you from dodgy fridge sellers selling faulty goods, so why aren’t tenants protected from ridiculous fees, shoddy houses and shady landlords?

Finding a house in good nick with a decent landlord is a mission in itself, so estate agent fees are an added stress that can make moving house extremely stressful and expensive.

Of course, estate agents are providing a service and there’s no denying that there’s a level of admin involved, but Lady Grender argues that these admin fees should be covered by landlords rather than the tenants themselves.

As these fees currently aren’t regulated, some agencies have been known to charge the most ridiculous fees you could imagine.

A site called Urban.co.uk revealed that some charges they’ve been made aware of include the following:

  • £7.50 to pick up your keys from them (not to get them cut, just pick them up)
  • Mandatory £5 fee to photocopy the tenancy agreement! That’s some expensive printing! They need to check out this guide 😉
  • £40 fee for unmarried couples… we wish this was a joke
  • £90 extra to move in on a Sunday.

Not all estate agents and landlords are out to get you, but how can you spot the warning signs?

Make sure you know your rights as a tenant and check your tenancy agreement thoroughly for anything suspicious before signing. Our guide to student house viewings  might also help you sniff out any issues before you sign.

Have you ever dealt with a dodgy landlord or estate agent? Let us know your story!

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