Freelancer Lets this week calls on the Government to regulate letting agent fees charged to tenants.
Debbie Rayner, managing director of Freelancer, said: "We are aware that some local agents charge excessive fees to their applicants. In some cases the high fee deters viewers from taking a property, which not only prevents them from living in the property of their choosing but also leaves it empty longer than it otherwise would have been, and so the landlord loses out as well.
"Until tenant fees have been capped, renters need to be aware that not all agents charge such high fees, and they should shop around for the best deal before committing to an agent. Freelancer Lets charge £180 per property, £30 of that being VAT."
The Labour party has again this week called for the banning of tenant fees altogether, but Debbie has concerns over that approach: "I can understand that tenant fees should be as low as possible and so by making them VAT exempt our applicants would save £30 right away.
"The problem with banning them altogether is that we would have to charge the landlord a higher fee and that would almost certainly result in a slightly higher rent. Over the course of the tenancy the tenant might well end up paying considerably more than they would have done by paying a reasonable fee during their application".
Speaking for the Government, Baroness Neville-Rolfe said that transparency of fees and regulation rather than a complete ban would be a better answer.
David Cox, managing director of ARLA, said: “Tenant fees cover the cost of essential items during the lettings agreement process such as reference checks, the drafting of the tenancy agreement, and the management of tenancy extension or renewal.
“All of these items cost the agent money to carry out, and provided the agent has a fair pricing structure, the agent will not make a noticeable profit on charging for these items.
“Of course, we’re in favour of better regulation for the private rental sector to ensure consumers are not taken advantage of. We want to see tenants paying a fair price for the service they receive. Our regulated agents don’t charge excessive fees.”