£800 agency fee … to rent £650-a-month one-bed flat

http://www.theguardian.com/money/2015/may/30/rent-property-tenancy-agreement-agency-charges

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Britain’s struggling tenants are facing demands for charges of £800 to secure even modest one-bed apartments as lettings agencies heap ever-higher fees on tenants – tenants already paying some of the highest rents in Europe. It is the latest evidence that the shortage of properties across England and Wales is enabling agents to squeeze tenants for “huge and disproportionate fees”.

Guardian Money reader Rory Gray, who recently moved to Exeter from Germany, was sent the demand by Fulfords estate agency in Exeter, which is part of the UK’s largest property group, Countrywide.

Related: Booming buy-to-let puts £112bn in pockets of British landlords

The Englishman, who was moving to the city for work, was astonished when told the level of charges which, he argues, bear no relation to the cost of providing the service.

In total, Gray was expected to pay nearly £2,300 upfront to get his hands on the keys to a £650-a-month flat, made up of a month’s deposit and first month’s rent, plus the £800. The extensive list adds another £72 if a tenant wants to move in on a Saturday.

And the rise in fees comes at the least-affordable time for hard-pressed renters who have little choice but to take out rented accommodation, and who may have to pay them every six months.

New rules that came into force this week mean agents can charge what they like, as long as they disclose the costs in an upfront way.

These range enormously across the country, with Citizens Advice finding that checking references could cost from just £6, rising to an extraordinary £300. Renters can also be hit by charges of between £15 and £300 for simply renewing their tenancies.

However, even this level of charges has been dwarfed by those demanded by award-winning Fulfords. It told Gray that it would charge him: a tenancy fee of £360 (including VAT); an admin fee of £90; a £60 referencing fee; a check-in fee of £90; a £90 guarantor fee; while a deed of guarantee (separate tenancy agreement) would cost a further £120 – and if he wanted to move in on a Saturday that would be a further £72.

After he complained, the agency agreed to a total of £650, but only if he paid the sum “immediately”. However, it doesn’t end there. Fulfords also charges £300 if tenants want to change the name of a sharer. To extend the tenancy it adds another £125, and anyone requiring an “outgoing reference” must pay £24. If a renter wants to keep a rabbit or other pet, there’s a “pet licence fee” of £75.

Gray says he was also told, in an email, that the listed fees were subject to 20% VAT, although there is no mention of VAT on the firm’s website. The agency later told us that the email Gray received was a mistake.

Fulfords describes itself as “one of the oldest property businesses in the South West” with around 25 branches, and at the Estate and Letting Agent Awards 2014, Exeter took the Gold.

Gray says he was bewildered by the scale of fees. “When the agency told me the amount,I was astonished,” he says. “I went back to my hotel and thought the agent must have made a mistake and mixed it up with the monthly rent or the deposit. When I saw their breakdown of costs they were complete nonsense – £300 for a tenancy agreement which I was told was a standard agreement they use for all tenants. So they simply print off their standard agreement and charge £300. A check-in fee of £72 to hand over the keys. I feel conned,” he says.

In a statement on behalf of Fulfords by Countrywide, a spokesperson said: “We pride ourselves on offering a high quality service that enables tenants to find good properties, which they can view at times that suit them including out of hours and weekends. We will meet with tenants to discuss any aspect of the move at any reasonable time, and work hard to ensure properties are ready for tenants when they want to move in.

“Our tenancy agreements are reviewed regularly to ensure they are up-to-date with industry guidelines, so tenants can feel confident the agreement they are entering into is sound and gives them the security of the tenure they need. We are transparent about the tenant fees we charge and in line with ASA guidelines our fees are advertised and available online. An error was made in charging Mr Gray an additional £88 when it shouldn’t have been. We apologise for this and will ensure the amount is refunded in full.”

Housing campaigners say Gray’s experience of letting fees is “all too common”. Betsy Dillner of Generation Rent said: “Recent legislation means agents have to be transparent about their fees, but that doesn’t stop them forcing tenants to pay through the nose if they really want a property. It’s time that fees for tenants were banned, which would not only end cases like this but encourage social mobility and properly recognise the business relationship as between the landlord and letting agent.”

Last week it emerged that rents across England and Wales have hit a new all-time high of £774 a month, according to the buy-to-let index from estate agents Your Move and Reeds Rains.

Monthly rental payments were up 4.6% in April compared to a year earlier – the fastest annual increase since November 2010.

In March, Citizens Advice warned that rip-off fees were costing Britain’s growing number of private sector tenants an average of £337 each, and called on them to be banned in England and Wales as they have been in Scotland.

This has all come at a tough time for Gray, who some readers may recognise from previous stories in the Guardian. His father was unlawfully killed by a drugs overdose given in Cambridgeshire in 2008 by a locum German doctor, Dr Daniel Ubani. After Gray and his brother confronted Ubani at a medical conference in Germany, calling him a “charlatan”, “killer” and “animal”, a court in Lindau ruled that he must pay legal costs, and write Ubani a letter promising never to call him an “animal” again. It has also threatened him with a £200,000 fine if he repeats the insult.