The Local Government Association (LGA), which represents 423 councils in England and Wales, is concerned that letting agents’ fees are acting as a barrier preventing people from finding a house or flat in the private rented sector. The association cited research by the homelessness charity Shelter showing that some lettings agents are charging non-refundable administration fees of more than £500.
Croydon Councillor Tony Newman, member of the environment and housing board at the LGA, said:
‘We have heard stories of some letting agents charging hundreds of pounds just to carry out basic credit and reference checks. For people in the early stages of their career and on relatively low incomes, this can prove a stretch too far.
‘Pricing people out of private rented housing in this way is adding to the pressure on already over-subscribed waiting lists for council and social housing.’
Mr Newman said safeguards need to be put in place to protect tenants from high letting agents’ fees and from landlords who rent out ‘shabby, substandard homes’.
The LGA is calling on the government to lift restrictions to make it easier to tackle rogue landlords who exploit tenants.
It called for courts to be able to issue fines which ‘properly reflect’ the harm caused by landlords who overcrowd properties. It also called for a review of the system for assessing private rented sector homes and said the current housing and health and safety rating system are too slow, bureaucratic and not fit for purpose. The LGA is also calling for more flexibility for councils over how they license shared homes in the private rented sector.
Mr Newman outlined his concerns as part of the Communities and Local Government select committee’s investigation into the private rented sector.