The Inside Edge
The issue of an unregulated private letting industry has hit the headlines on a number of occasions in recent weeks and one of the problems faced by tenants has been highlighted this week by Labour’s Opposition Government.
Hilary Benn, the shadow secretary of state for communities and local government has spoken out over the high charges placed by letting agents and has claimed that some are genuinely ‘ripping off’ landlords and tenants. The numbers in question don’t just relate to commission charges as Labour are also concerned about fees for add-ons such as reference checking and sending renewal letters.
The Labour Party underlined their concerns amidst claims that in 2013, the numbers of homes rented out privately is set to exceed social housing for the first time and their findings suggest that agents’ charges vary to a huge extent.
The charges for reference checking range from a mere £10.00 all the way up to an unnecessarily excessive £275.00 while the charge for renewing a tenancy - a process which involves sending an e-mail or a letter and asking for it to be signed and returned – varied from £12.00 right up to £220.00.
“What is actually £220 of cost in terms of administration if you had just to send an email, open an envelope, stick it on file?” Asked Mr Benn.
“That seems to me a rip-off. It’s a problem not just for tenants but also for landlords.”
Hilary Benn and his party have promised that they will look into ways in which caps can be introduced in the private sector and this is a move that has been widely welcomed by Landlords and Tenants Groups right across the country.
“Anyone can set themselves up as a letting agent, and then potentially abscond with hundreds of thousands of pounds of people’s cash,” said Ian Fletcher, Director of Policy at the British Property Federation.
“It is therefore counterintuitive that estate agents who handle relatively little cash are regulated, but letting agents who handle lots of cash are not.”
Labour has conceded that part of the problem lies in the fact that the levels of social housing weren’t increased when they were in power. As a result, more and more home seekers are turning to the private rental sector as they are unable to get on to the property ladder and into home ownership.
In the present day, the Labour Party recognise that the private sector is therefore meeting an urgent need and it seems set to press on with finding a solution to any excessive agents’ charges.