Tenants 'let down by extra costs'

The government recently announced plans for a landlord database

Some tenants face "unjustified and excessive" charges from lettings agents in England and Wales, says a charity.

A report by Citizens Advice says that extra costs, including administration fees and reference checks, could add up to £600 to the cost of renting a home.

The charity claimed the charges often bore no relation to the actual cost of the service.

However, the findings were based in part on a survey of tenants going to the charity's website for help.

The report comes out a week after the government announced it wanted a national register of private landlords in England and to create an independent regulator for letting agents.

New rules

In the light of its report, Citizens Advice said it wanted the new regulations to include a ban on additional charges faced by tenants on top of their rent.

The letting agreement is, by its nature, a complex transaction centred on the emotive subject of people's homes Ian Potter, Arla

It said that many of these costs were imposed for tasks that were part of the "routine business" of letting and managing a property.

"[The charges] can be a huge barrier for people on low and even average incomes," said David Harker, chief executive of Citizens Advice.

"In some cases letting agents appear to make them up as they go along."

Anyone can set themselves up as a letting agent, and the charity said that some imposed charges such as a non-returnable holding deposit, a deposit administration charge, an administration fee, and check-in and check-out inventory charges.

In addition, charges for checking references ranged from £10 to £275, while the charge for renewing a tenancy ranged from £12 to £200, the charity claimed.

Double-charging

The report also suggested scope for double-charging by agents, with tenants and landlords both being charged for the same service.

The report was based on an online survey of 1,300 tenants visiting the Citizens Advice website between August and November 2008.

It was also based on a review of 424 letting agents by 51 of the charity's branches in England and Wales.

Ian Potter, operations manager of the Association of Residential Letting Agents (Arla), said that his organisation's code of practice advised agents to ensure that fees and charges were clear and reasonable.

Arla has also campaigned to set up a licensing scheme for members.

"The letting agreement is, by its nature, a complex transaction centred on the emotive subject of people's homes," said Mr Potter.

"A key element of Arla's licensing campaign to professionalise the sector is to increase consumer understanding of this complex process."