Charity wants to scrap letting fees for tenants.

letting agent fees

One of the things that have always puzzled me about the property market, is how laws can be completely different in Scotland, than in England and Wales.

One of those such laws, surrounds tenants paying agency fees, when renting a property.  In England, tenants are expected to come up with anything from £150 to a staggering £700, for setting up the agreement, doing the credit checks and various other administration services, where as in Scotland, the landlord carries the brunt of all charges.

Well it appears now that the Citizens Advice charity, want the same system in England and Wales, that they have in Scotland.  There main reason for this is that if you are a landlord, you can shop around and find the right agent, at the right price and level of service for your property.  But as a tenant, you are stuck with the agent the landlord has chosen, and are therefore at the mercy of their pricing structure, without the ability to go elsewhere.

They also complained that charges have been creeping up over the last few years and that students in particular, especially those on short term agreements, often are paying fees every year when they renew their agreements.

There is no doubt that agencies need to carry out this work and of course, somebody at some point needs to pay for it but by pushing the problem to the landlord, rather than the tenant, we might see these fees becoming a little more competitive as the landlord would view it as part of the overall package and look for a keener price.

Of course there is a further issue that might need to be looked at.  Currently a letting agent in England and Wales, is taking money from the landlord and the tenant, which in effect, makes both of them “customers”.  By doing this, they are having to act in the best interest of both parties in the rental equation but despite the fact that most agencies do a decent job of resolving any issues, at the end of the day, their underlying loyalty, has to be with the landlord.

There are not too many industries where somebody takes money from both sides, even with recruitment companies, you don’t get asked to pay fees to an agency when you register.  The only money they would take from you would be legal tax and NI deductions if you were a temp but everything else, is charged to the potential employer. Recruitment agencies still need to follow up references, get people registered and organise appointments but they only take money from one side.

You’d also never see a solicitor acting for two sides in a legal case.  It would scream a conflict of interest and would be impossible to lead to a fair trial but with letting agents, where we are currently, they are representing both parties in a transaction, which could give rise to a conflict of interest too.

Nobody likes paying fees.  Maybe they should simply be part of the landlords package and included in the overall deal.  If a property is being let and managed, maybe the agent would lower the fees to the landlord, to get the management side of the deal and the ongoing revenue?

It’s an interesting subject and I’ve got a feeling we haven’t heard the last of this particular issue.


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