Cheap rents -- but £2,200 hidden fees

GReeDY letting agents are hiking fees to reap extra profit from the 8.5 million renters who are frozen out of the property market.

These property middle men — who act as an agent for landlords and tenants — are hitting renters with administration and deposit fees of up to £2,200 before the first month’s rent has even been paid.

and in some cases, these firms are charging landlords and tenants for carrying out an identical task.

These rogue lettings agents are cashing in on a rental boom. high property prices, strict lending conditions and hefty deposit requirements mean the number of people stuck renting because they can’t afford to buy a home of their own has doubled in the past 15 years.

There are now twice as many families with children renting as there were five years ago. Many have returned to renting after years as homeowners because they can’t afford to move up the property ladder.

Families account for more than one million of the 3.6 million households in rented accommodation.

‘Renters are increasingly a picture of hard- working, middle- income Britain,’ says antonia Bance, head of campaigns at charity Shelter.

‘Older people need to wake up to the fact that it is not like it was when they were growing up. and if they don’t experience letting agents first hand, they will experience them vicariously through their children.’

The type of fees charged and how much they cost vary depending on the letting agent and where you live.

all letting agents, for example, charge a non-refundable admin fee. But this can be anything from £90 to £375 or more.

The admin charge supposedly covers the cost of drawing up paperwork for the tenancy agreement and carrying out reference checks with your bank and employer. however, there are layer upon layer of additional charges on top of this.

These include holding fees to secure sought-after properties, charges to perform a credit check and even a fee for taking your deposit.

Some also charge up to £144 for drawing up an inventory.

Usually the landlord covers the check-in charge and the tenant the check- out charge. But increasingly tenants are being made to pay both. In some cases, landlord and tenant are charged for drawing up one inventory.

and the charges don’t stop once a tenant moves in. Frequently, there is a £90 fee for renewing a contract. experts say there is no justification for agents charging this much. ‘Fees are completely disproportionate to the level of service received,’ says Matthew Pennycook, senior analyst and researcher at think tank Resolution. ‘a full credit check can be done online for less than £20 and all agents have a standard contract that can be edited and printed.’ Ian Potter, managing director of the association of Residential Letting agents, says: ‘If two or three people are sharing a property then it can take up to half a day to carry out reference checks.

‘We fully support that fees should be fair and transparent, but the cheaper the fees, the more the renter needs to be aware. Low fees are a common feature of agents who disappear with your money.’ For a guide to your rights as a tenant, see this is money. co.uk/tenants.

Letting agents can sign up to a voluntary code of practice with a body such as the association of Residential Letting agents or the National approved Letting Scheme. This provides tenants will some protection as you have someone to complain to if things go wrong. There is also a property ombudsman you can complain to — it has the power to award up to £25,000 in compensation. however, again, the letting agent has to sign up voluntarily.