Whenever Vicky Spratt, features editor at women’s website The Debrief, wrote or published pieces about housing, she found something familiar to us here at CityMetric: people care about it. A lot. “The comments would come flooding in, emails would come flooding in, we’d have readers submitting their own stories. I realised it wasn’t just me who thought this was bad. It was so many people.”
Spratt has been renting for a full decade, ever since she left home for university aged 18, and, like many in her generation, there’s no end in sight. So she decided to do something about it. In partnership with her publication, she launched the Make Renting Fair campaign to end non-refundable letting or estate agency fees, which vary hugely, are unregulated, and can set renters back hundreds of pounds a pop. The Debrief’s change.org petition addressed to housing minister Brandon Lewis already has almost 250,000 signatures at time of writing.
“It’s an aspect of the renting market they can really easily change,” she says now. It’s also symbolic of the unbalanced power dynamic between tenants in a housing crisis and those renting the properties. “I’ve always thought they were extortionate,” Spratt says, “but I’ve always paid them, because when you’re looking for somewhere to live you’re so stressed out and so anxious, the last thing you want to do is bite the hand that feeds and question the state agent.
Letting fees are charged to the tenant when they sign for a property, and can be called anything from “admin fees” to “reference checks” and “inventory fees”. They vary hugely, from around £50 to £600 or even, in extreme cases, £900 per person. Foxtons, which has 62 offices in London and Surrey, charges £210 just to change a name on the tenancy. Other agencies charge “re-signing fees” when you stay in the same property for another year.
These fees allegedly go towards admin, but Spratt has researched credit checks and the cost of tenancy documentation and found that the fees charged are vastly inflated. “You wouldn’t accept this with any other service provider,” she notes, “so why should we accept it with our homes?”.
The campaign page. Image: Change.org.
Spratt reckons she has personally spent over £2000 on letting fees since she began renting, and the picture is similar for most renters. “This is going to be my reality for a really long time, and the reality of an entire generation,” Spratt says, and indeed, Shelter has found that 31 per cent of England’s 9 million renters believe they will be doing so for the rest of their lives. It’s unlikely we’re going to become a city of homeowners anytime soon – so the current situation seems untenable at best, exploitative at worst.
In Scotland, laws against any fees beyond a refundable deposit and rent in advance were set in stone in 2012, and while the BBC has found that some tenants are still charged, at least a ban is in place.
Spratt believes a similar ban is workable in England – “the fees are unjustified, it’s a complete circus” – and most of the main political parties agree. Labour, the Greens, the Liberal Democrats and even Ukip had manifesto pledges at the 2015 election to end letting fees at the last election, but unfortunately the Conservative party did not. Incidentally, at least a third of Conservative MPs are also landlords. Housing Minister and landlord Brandon Lewis sent Spratt a statement explaining that banning fees would be problematic and “rents could go up”.
Conservative Home also cited rent raises of 2.7 per cent in Scotland in a year as evidence that the ban didn’t work, but rents increased across the UK in this period. In the year up to March 2016, rents in London increased by 4.9 per cent. The negative press may be stemming from the fact that landlords are worried that the policy will cost them money, but the reality is that even if they passed on some of the costs for contracts and credit checks to tenants, it’s unlikely to match the extortionate fees currently charged by agents.
Last year, new legislation stipulated that agents must now publish their fees publicly – but in the fraught rental market where agents know they can charge what they want, will this really make any difference? I know of precisely no renters who would feel they can afford to “shop around” agencies based on their fees. Properties are difficult enough to find as it is.
The Debrief is aimed at younger women, and many of Spratt’s own anecdotes come from those under 30. But once the Make Renting Fair campaign launched, the site was inundated with emails from people of all ages – “families; people who are 50 or 60 and perhaps never bought a house. It’s by no means limited to young people” – caught in the same trap. The Debrief petition has attracted signatures from those affected, but also their parents and grandparents who “can’t believe” the current state of the rental market.
Meanwhile, there are other options. The rise of sites like spareroom.com, where many people now rent out entire houses, or the property section of Gumtree, mean young people can now cut out the middle men. Spratt has used a site called OpenRent to find a property, where landlords list their own properties for a fee, and says “It was one of the best experiences I’ve had. No fees, no agent. And you get to see what sort of person you’re going to be renting from”. Just as Uber and AirBnB have cut costs in their industries (arguably at the cost of safety and worker rights) perhaps technology could undercut estate agents.
Yet these tactics are only open to those with the nous, time and energy to sift through alternative sites – and sometimes, the right property for the right price comes with an agent attached. Rightly or wrongly, young families in particular may feel uncomfortable going through less “official” channels. Fees are something that it is possible to legislate against, and while it wouldn’t solve the renting crisis, a ban would mean tenants no longer need such enormous lumps of money just to begin paying for a home. So why not?