Every time stats are released on housing transactions or house prices, we receive comments from industry folk calling for a boost in property supply and an improved housing policy to give first-time buyers a better chance.
And right they are to call for such things: the lack of affordable property is one of the biggest hurdles for would-be homebuyers in the UK. But it’s not the only obstacle.
Of course, the majority of those hoping to get a foot on the housing ladder are renters, many of whom use letting agents to find a property. Now, I’m not in the habit of using this column to vent on personal matters or pedal an agenda of self-interest, but I happen to be one of thousands trying to save for a first home while also facing extortionate letting agent fees.
When one first takes on a rental property via an agent, charges include individual reference fees, guarantor reference fees, corporate reference fees, tenancy agreement fees and inventory fees. Then, if one chooses to stay, there are extension-of-tenancy fees and change-of-tenant fees. These are on top of an admin deposit, up to two months’ rental deposit and the first month’s rent – all expected in one big, lump sum.
How is it possible to justify this level of charge for ‘administration’, particularly as tenants aren’t receiving any extra care and essentially do all the admin themselves?
The ban on fees set out in the housing white paper was welcomed by tenants but we haven’t heard much on it since and, while the consultation on the matter closes on 2 June, speculation is that it won’t be passed through Parliament for another two years.
Don’t get me wrong: I don’t believe the fees should be shifted to landlords; the buy-to-let market has suffered a big enough hit as it is. But fees of this proportion applied to those saving for a mortgage deposit equally stall the market, because saving becomes ever more unlikely. If agencies made the housemoving process smoother and less stressful in some way then fees might be warranted, but I have yet to come across one that does.
Government figures show that 57 per cent of landlords don’t use a lettings agency, and I expect that to increase once the ban on fees is passed if agencies transfer the fee to them.
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