Report Finds Letting Agents Are Failing to Disclose Fees

March 11, 2013

The Advertising Standards Agency (ASA) have criticized letting agents for not properly disclosing compulsory fees and charges, and have ordered that they must display all fees in any advertising or publicity materials for prospective renters.

The ASA published a ruling against estate agent Your Move this week for not making it clear on their website Rightmove that additional non-optional fees would be added to the price quoted on an online property listing.

The ruling stated that from now on all compulsory fees and charges must be made clear. If the fees are not able to be calculated in advance then that must also be made clear and there must be information provided for the consumer on how the final charges will be decided.

“Hidden fees are not only unfair, they hit those who are struggling hardest. Our ruling today makes clear that letting agents need to get their houses in order and treat potential tenants fairly.

“It is now our priority to make sure agents across the sector bring their advertising into line,” said Guy Parker, ASA chief executive.

The ruling from the ASA comes in the same week that four letting agencies were criticised by consumer group Which? for not being upfront about fees, following a mystery shopping investigation.

Researchers from Which? posed as potential tenants and visited four branches each of Foxtons, Barnard Marcus, Martin & Co and Your Move estate agencies. Only one mystery shopper in a branch of Foxtons was given information on compulsory fees without having to ask. Others were not given full information, even when it was requested.

Which? found that the average cost for administration and referencing across all agents was £310, and the highest was £420. With some tenants also facing check-in and check-out fees, the total can be as high as £610.

Richard Lloyd, executive director at Which? said: “People should know all the costs before they invest time and effort in viewings. Drip feeding fees is unfair and a major barrier to people comparing agents and properties.

“Despite its dramatic growth, there is also an alarming lack of consumer protection and redress in the rental sector. Tenants deserve much better.”

A spokesperson for Your Move said, “We strongly believe in the principles of the Consumer Protection from Unfair Trading Regulations 2008 as demonstrated by the fact that we provide applicants with information at a stage prior to them making their decision to enter into a tenancy agreement – the timing of which compliments the Office of Fair Trading guidance for estate agents, and that we have also actively engaged with the regulators, in particular the OFT.

“In view of the findings, however, we will of course be reviewing our approach and in support of this look forward to the OFT introducing official guidance for the lettings market to ensure greater clarity on matters of this kind.”