£10 to have a friend to stay? The hidden costs facing generation rent

http://www.theguardian.com/money/2016/jan/23/hidden-costs-facing-generation-rent

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A new sitcom began on Channel 4 this month about a group of young people who are forced to live together because they can’t afford to pay sky-high rents for their own places.

Crashing has been described as the comic voice of generation rent but, out in the real world, the joke has worn thin as tenants are hit with increasingly ridiculous demands for cash to secure properties in a highly competitive housing market.

Now, in a development that not even the most imaginative scriptwriter could have foreseen, tenants in parts of London are being asked to pay £10 to have a friend to stay over, while others claim they are being charged to cook or to wash clothes in their own home. Even before they get to the point of moving in, the same tenants are being charged more than £100 just to see a list of properties.

Traditional letting agents are not allowed to charge tenants for registering or seeing a list of properties if they charge the landlord too, but companies such as EasyLets UK, Spacelet and Flatland are “relocation” or “appointment-making agents”. Instead of receiving payment from the landlords whose homes they market, they charge would-be tenants upfront fees. And now, it seems, the landlords are adding on more charges.

University graduate Gloria Orphanidou, from Cyprus, has been trying to find a cheap room to rent in the capital since December. She paid West End “relocation agent” EasyLets £110 to find accommodation within her £500-a-month budget after seeing properties listed by the agents on Rightmove.

She was told bills were included in the advertised rents but, when she approached the landlords on the list, one told her she would be charged a fee every time she cooked a meal or did her laundry. “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,” she said.

Tactics like these appear to be par for the course now in a rental market becoming increasingly competitive and ever more expensive. The latest letting figures, released on 15 January by estate agents Your Move and Reeds Rains, revealed that rents in England and Wales rose by 3.4% in 2015, driving the cost of homes to record levels in some regions. The largest increase over the year was in the east of England, where rents rose by 7.8% to an average of £831 a month, while in London a 6.3% rise took the average to £1,251.

Demand for rented property has been booming as would-be first-time buyers are priced out of that market, while estate agents in London’s most expensive neighbourhoods have reported a rise in the number of wealthy people opting to rent rather than buy in the wake of stamp duty rises.

Last week a flat that was marketed as the cheapest in London sold for £79,000. Despite measuring just 75 square feet, it had 36 viewings and nine offers. The owner plans to rent it out for part of the year – at £1,000 a month.

Meanwhile, “flatmating” – speed dating with a key thrown in – is soaring in popularity, as is property guardianship – looking after a property for an investor by “sitting” it, as depicted in Crashing.

Orphanidou returned to EasyLets to complain that all the rooms she had been shown were unsuitable, but she was refused a refund of the £110 fee. “I felt so stupid and angry at myself. 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,” she said.

In response to inquiries by the Observer, EasyLets forwarded 16 text messages from satisfied customers who had found a room via the service. “Please mention in your article the few people who text me and thank me for my help,” said EasyLets UK director David Funaro in another text to the Observer. “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.”

Housing lawyer Giles Peaker of Anthony Gold Solicitors describes the £10 guest fee as “dreadful” and says the contract term could be deemed unfair and therefore unenforceable.

Dan Wilson Craw, policy officer at Generation Rent, said: “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.”