To charge or not to charge...

This morning the media is once again awash with reports of Letting agents 'ripping off' tenants by charging high fees to create a tenancy.

On BBC radio 4 this morning Shelter stated that they believe letting agents should not charge tenants anything other than rent and deposit as they landlord is already paying for the same service.

I sit on two fences here, 1 as a letting agent and 2 as a a tenant, so I see this from 3 angles, as  a business, as tenant and I also see my landlords point of view on this too.

Firstly, to correct Shelters comments, the tenant and the landlord do not pay for the same service, the landlord is my client and paying me for my service, this includes, ensuring the property is fit to rent out (you'd be surprised what some landlords will try and rent) 

Advise on the correct and achievable rental value (not necessarily what the landlord thinks its worth) 

Inform the landlord of his legal obligations and ensure all the legal inspections are done, Gas cert, EPC, electrical test(although not a legal requirement it is strongly recommended)

Then we advertise the property and with the extremly high costs of the property portals as well as local papers this in itself can eat into any landlords budget.

This list obviously is not exhausted but it gives an idea. Now with all this in mind we have to do all this and more for a fee that both us as a business and the landlord as the client is happy with.

On the flipside, as a tenant I'm afraid there are a few costs involved there, the landlord does not pay for you to be referenced, if he did just think how many applicants he may have to pay for. 

So this cost falls to the potential tenants, this shows that someone is serious about renting the property, now the cost for this should not break the bank, at the risk of putting my head above the parapit here, a good full reference will cost an agent between £20-£30 per tenant, so with a profit in mind, I can not see why any agent could charge a tenant over £100? 

The issue we have is an increase in people needing to rent and an increase in agents who know full well that there is nothing stopping them setting their own prices.

We do not need to follow in Scotlands' footsteps and abolish tenants fees altogether because all this will do is increase the cost to landlords, who in turn will cover these costs by increasing rents.

All we need to do is set the bar on reasonable fees and unlike all other legislation which comes in and slips under the public radar, the government needs to ensure there is a full media campaign to make sure the people that matter, the public are aware of what they should be expecting to be charged by a letting agent.