Shelter is on the warpath again, reporting on its findings in a ‘mass participative mystery shop ’ of 85 lettings agents in Wales.

The report, published on Friday, says that “Setting up a tenancy can be eye-wateringly expensive. Not only must new tenants find thousands of pounds upfront for tenancy deposits and rent in advance – they also have to pay fees to letting agents, which often cost hundreds and are difficult to compare in the marketplace.”

Between January and March 2016 they reviewed websites and rang agents to find out what fees they charged and how they displayed them.

“What we found amounts to a widespread disregard for the law. More than half of the agents we mystery shopped are not following legal requirements to display their fees clearly. Many agents gave information about fees over the phone that contradicted what was on their websites, while some appeared to be making up fees on the spot.

“Overall, the highest fee was 12 times as high as the lowest.”

Shelter says that this is “an uncompetitive market which is failing to drive down prices for the growing number of individuals, couples and families in Wales who rely on private rented housing. This needs to change.

In the face of these realities there is only one realistic solution – to ban letting agents from charging fees to tenants to establish a tenancy.”

Displaying fees The Consumer Rights Act 2015 requires agents to display a full list of fees in the office as well as on a website if applicable. However Shelter reported that more than half (52 per cent) did not display a clear list of fees on their website.

Of these many mentioned that ‘a fee’ is required to begin a tenancy, but did not provide an actual price, or provide a way to calculate the amount of fees.

“Not only does this mean that more than half of the agents we mystery shopped aren’t adhering to duties under the new law – it also means that people searching for a new home won’t be able to work out the full cost of moving until they contact the agent directly.

“One letting agent actively refused to reveal any information to the mystery shopper, stating that no information on fees would be disclosed until prospective tenants register with the agent online. “

Of the letting agents that offered enough information online to make a comparison with the information offered over the phone, Shelter says that more 55 per cent offered contradictory information.

One agent’s website stated that its administration fee included a £100 registration fee for the first tenant plus £80 per additional tenant plus VAT. However the information offered over the phone by the same agent was £100 for one person or £125 for two people.
Another letting agent’s website claimed an administration fee of £120. However the fee given over the phone was explained to vary between £150 and £295.
Late payment fees

Many agents apparently stated that as long as rent is paid within a few days of the due date then no action would be taken. However, “18 per cent of agents admitted they didn’t know if they charged a late fee, and some appeared to be making up a fee on the spot. For example, one agent stated that ‘nothing is set in stone’ and another said they ‘may charge for the hassle of chasing’.”

52 per cent of agents are not displaying fees on their website as they are required to do by law.

18 per cent said they didn’t know if they charged a late fee.

Of the agents that did display fees online, more than half 55 per cent gave different fees over the phone.

In response to the survey, Isobel Thomson, Chief Executive of the National Approved Letting Scheme (NALS) said, “We want a better, fairer, private rented sector for all, but banning letting agent fees in Wales is not the answer. Access to any form of housing tenure comes with associated costs, and renting in the private sector is no different. Letting agents are running businesses, and should be able to reasonably charge for the work they do in setting up a tenancy.

“There are many letting agents across Wales who provide an excellent service, and stick to the rules, but the rogues need to be driven out. Trading standards and local authorities are responsible for enforcing the law on letting agents, and they must come down hard on any agent not displaying their fees.”