Shocking new details of charges within the lettings industry have recently emerged, indicating that tenants are increasingly being faced with hidden costs.
Some renters in London are being charged £10 whenever they have a friend to stay, while others report that they are being asked to pay whenever they cook or wash their clothes. In some cases, prospective tenants are being charged over £100 just to see a list of properties.
Letting agents are not permitted to charge tenants for registering or seeing a list of properties if they also charge the landlord. However, firms such as EasyLets UK, Spacelet or Flatland, which are relocation or appointment-making agents, find their way around the rule.
The Hidden Costs of Renting
Instead of receiving payment from the landlords whose properties they market, they charge potential renters upfront fees. It now appears that landlords too are adding on more costs.
Gloria Orphanidou, a graduate from Cyprus, has been trying to find a room to rent in the capital since December that is within her £500 per month budget. She paid West End agent EasyLets £110 to find a property after seeing potential homes listed by the agent on Rightmove.
She was told that bills were included in the advertised rent prices, but when she approached the landlords of these properties, one informed her that she would be charged a fee every time she cooked or did laundry.
She adds: “The other two were properties living with landlords, where I was not allowed to have any visitors unless I paid them £10 every time someone came to see me.”
These strategies appear to have become commonplace in a market that is as competitive as ever and is becoming increasingly expensive.
The latest data on the private rental sector, from Your Move and Reeds Rains, shows that rent prices in England and Wales rose by an average of 3.4% in 2015, taking the cost of renting in some regions to record highs.
The greatest increase over the last year was in the East of England, where rents grew by 7.8% to an average of £831 a month. Meanwhile, the 6.3% rise in London took the average to £1,251.
Demand for private rental accommodation has been fuelled by the number of hopeful first time buyers struggling to get onto the property ladder. In prime central London, estate agents have reported an increase in the amount of wealthy households looking to rent rather than buy, due to Stamp Duty rises.
Over the weekend, we uncovered a flat that was named the cheapest in London. It was sold for £79,000 despite being just 75 square feet. Take a look: /is-this-the-cheapest-flat-in-london/
Orphanidou complained to EasyLets that the homes she was shown were inappropriate, but the company refused to refund the £110 fee.
“I felt so stupid and angry at myself,” she comments. “I am broke enough as it is, with just enough money to pay rent for a cheap room, and I had wasted £110 on an agent who clearly doesn’t care and won’t help me find a house.”1
The Observer inquired into the case, to which EasyLets forwarded 16 text messages from satisfied clients who had found a room through the agent.
The Director of EasyLets UK, David Funaro, told the Observer: “Please mention in your article the few people who text me and thank me for my help. I did find a place for Gloria with permission to have her boyfriend over on the weekend and pay £10 for the night he would stay to the landlord and she even liked the room.”1
Giles Peaker, a housing lawyer at Anthony Gold Solicitors, called the £10 fee “dreadful”1 and says the contract term could be deemed unfair and therefore unenforceable.
The Policy Officer at Generation Rent, Dan Wilson Craw, adds: “Paying an upfront fee before seeing a single property, let alone agreeing a tenancy, is full of risk. To learn that you might then be asked to pay extra for everyday behaviour like having a partner stay over or cooking a meal is shocking.”1
Have you faced any similar charges yourself? Or perhaps you’ve imposed fees like this to your tenants? Either way, do you agree with the costs?
1 http://www.theguardian.com/money/2016/jan/23/hidden-costs-facing-generation-rent