Debates between Sarah Champion and Lucy Powell during the 2010-2015 Parliament

Wed 27th Feb 2013

Letting Agents

Debate between Sarah Champion and Lucy Powell
Wednesday 27th February 2013

(11 years, 9 months ago)

Westminster Hall
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Sarah Champion Portrait Sarah Champion
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My hon. Friend makes a good point, and I completely agree.

Across the industry, there is a problem with rip-off and opaque fees charged by letting and management agencies. A national survey of letting agents found that 94% impose additional charges on tenants on top of the tenancy bond, rent or rent in advance. The citizens advice bureau in Dorset reported a client who was considering renting a three-bedroom property. He was shocked to find hidden in the tenancy agreement a requirement for him to pay £94 every six months for “search fees.”

The national survey also found huge variations in the size of such charges. Charges for checking references ranged from £10 to £275, and charges for renewing a tenancy ranged from £12 to £220. In some cases, additional charges for a tenancy amounted to more than £600, which is a vast amount of additional money for anyone to find. The fact the fees vary so much shows that those charging the premium are clearly making a huge profit.

Lucy Powell Portrait Lucy Powell (Manchester Central) (Lab/Co-op)
- Hansard - - - Excerpts

Does my hon. Friend agree that letting agents’ charges to landlords are also absolutely extortionate? It is not just tenants who face charges; many landlords, when tenancies are renewed, must pay 10% a year in ongoing charges. I get many complaints in my constituency, as I am sure she does, from landlords who feel that the market needs regulation.

Sarah Champion Portrait Sarah Champion
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My hon. Friend makes a good point. It is both tenants and landlords who suffer from unscrupulous letting agents, and we must do more to protect them. This cannot continue.

Up-front fees present a significant barrier to low-income people looking to rent, in some cases with serious consequences. The charity Crisis contacted me about Danny, a 34-year-old man who became homeless after a family break-up. Danny was given a list of letting agents who were happy to take housing benefit tenants. He called them daily for several weeks, looking for a property. He was eventually offered a flat and told that he could move in after six weeks.

Danny secured a crisis loan to help him pay rent in advance. The agent asked him for a £250 administration fee, refusing to confirm in writing what the fee was for or to provide a signed tenancy agreement. The agent then told Danny that others were interested in the property and asked for an additional £800 holding fee to keep the flat off the market. He knew Danny’s situation but refused to reduce the fees. Although he tried to scrape together the money, Danny could not take up the tenancy. Having forgone his place in a winter shelter, he slept rough before going to Crisis. He is now living in a hostel and looking to move into private rented accommodation again. I would love to say that Danny’s story is unique, but it is not.