Feeling let down…?

While house prices have declined markedly over the past 18 months, they have still yet to reach an affordable level, for low earners or single households in particular.

Above: Olive the orangutan was perplexed at the price of her credit check

With the median wage (the amount which 50 per cent of people are adjudged to earn more and 50 per cent less) recently estimated to be £20,000, where does that leave those of us without partners or low earning couples who don’t fancy their first step on the property ladder resembling a squat?

The answer is probably the rental market and all the joys it brings, namely the inflated charges that tenants are obliged to pay out to letting agents. The Citizen’s Advice Bureau (CAB) shed some well overdue light on this practice recently, highlighting the need for change and regulation.

Entitled ‘Let down’ the report detailed how 94 per cent of letting agents in the UK impose additional charges to customers. This discounts tenancy deposits and rents, with some adding up to seven additional fees for various duties. These include: a deposit administration fee, a reference check charge, an administration fee, a check-in inventory charge, a check out inventory charge, a tenancy renewal fee and a non-refundable holding deposit.

A reference check charge? If that’s any more than the cost of a stamp or a phone call to confirm the supplied details then something is clearly not right there either. It continues; a check-in and check-out inventory charge? I must have missed the point when letting agents began to mistake themselves for airport terminal staff.

Joking aside (the woman with two children in the report who paid out over £800 in fees, only to get nothing in return, certainly won’t be laughing), the CAB is dead right to ask Government to expand its recently announced plans to include a ban on these additional charges that have been labelled as simply the routine business of letting an managing property.

Fees charged for credit checks are also an issue that have to be addressed. If consumers are being charged anything from £10 to £275 for this service (non-refundable whatever the outcome, of course) then decisive action is needed. How about a system whereby a consumer can buy an up to date, personal credit report from a trusted source which is forwarded on to the relevant letting agent? Not ideal perhaps, but some real dialogue is needed to help would-be renters out.

Nobody is looking for a free ride; people realise that the process of securing a rental property is costly. Damage deposits, rent in advance and the like are fair game and expected. What isn’t on or right are hyper inflated charges for services that should be part of the service. For that reason, we should support the calls from the CAB for tighter regulation – let’s hope the Government is listening.

James Henderson, Reporter, Moneyfacts Group