Report reveals hidden costs of renting privately

The hidden costs of renting private accommodation in Northern Ireland have been revealed in an undercover survey carried out by Housing Rights Service.  A ‘mystery shopping’ survey of 40 lettings agents across Northern Ireland found that upfront fees of as much as £100 were demanded by some agents to cover routine services such as credit checks and general administration costs. This was on top of a deposit (normally one month’s rent) and a month’s rent in advance.

The findings were published today by Housing Rights Service and show that prospective tenants in the private rented sector are faced with significant upfront costs, variable fees and a lack of transparency in an unregulated lettings market.

The investigation found that the average cost charged by letting agents for such fees was £48, with the highest cost £100. The charity believes these fees can create a major financial obstacle for prospective tenants to overcome when they already face paying a month’s rent in advance and a deposit before they even receive the keys to their rented accommodation.

 According to Nicola McCrudden, Policy Manager: “We are concerned that many local letting agents are not only increasing financial pressures on hard pressed tenants who urgently need a roof over their heads and who, in many cases, have little or no choice but to pay these charges; but they are also undermining the work of those good letting agents who offer a fair deal to tenants. The charges are particularly unjustified considering that many landlords are also likely to be paying agents for the same services as tenants. There is a real danger that these fees are preventing some people on low incomes from finding suitable private rented accommodation and could be adding pressure on already over-subscribed social housing waiting list.”

 Housing Rights Service believes that these charges are unfair and such business costs should be covered by either the agents themselves or the landlord. Unlike estate agents, letting agents are unregulated and under no compulsion to hold membership of an ombudsman service, leaving dissatisfied tenants with no access to redress. Housing Rights Service has also called for greater clarity in the law and to rule if the practice of charging such fees is illegal as is the case in Scotland.

 The housing charity recommends that there should be a requirement for letting agents to clearly present thee fees on their websites, in adverts and in all promotional material in a way that is easily comparable across letting agents.

 On several occasions in the course of the survey, letting agency staff were unable to provide accurate information on the fees that they charge and only 10% of the agents displayed information about fees on their websites. Housing Rights Service believes that by failing to disclose fees upfront or during their first contact with a customer, letting agents are breaching consumer law by not providing this information in a manner that is clear and timely. According to the Advertising Standards Agency (ASA), letting agents must clearly display tenancy fees when marketing rental properties.

 Nicola McCrudden added:” We need more transparency so prospective tenants at least know what fees they’re facing and to help create a more competitive lettings market. We believe that the evidence from this survey supports the call for regulation of the letting agent industry and that no charges should be imposed on tenants for functions which are part of the routine letting and landlord management process.”