Darlington Citizens Advice Bureau (CAB) is warning that ‘rip-off’ letting agent’s fees are causing renters financial problems in the borough.
New evidence uncovered by the charity reveals tenants are frequently charged fees often hidden by letting agents – to the tune of £337 on average nationally.
These charges come on top of advertised rent prices and deposits and in some cases can force people into debt, the charity says.
Nationally in the last year, Citizens Advice has seen around 14,500 cases of client problems with private rented rents and other charges
Most agents charge for checking references, but costs nationally range from as little as £6 to £300, according to the study.
Renters can also be hit by charges ranging from between £15 to £300 for simply renewing their tenancies.
Some agents charged £300 for credit checks that are widely available for £25.
The Still Let Down report advises that letting agents’ fees should be banned to protect tenants in the private rental sector.
Neeraj Sharma, CEO of Darlington Citizens Advice said:
“Some renters in Darlington area are being let down by agencies.
“People are being hit with fees for inventories, credit checks, and tenancy renewals.
“Adding expensive agency fees on top of rents can stretch people’s finances to breaking point.
“If you’re struggling because of letting agent’s fees, then come to Citizens Advice for help as soon as you know there’s a problem.”
Despite an Advertising Standards Authority (ASA) requirement being introduced in 2013 that agents should give clear information about fees, this study found that only a third provided full written details.
The requirement will become law later this year which will mean agents have to publish fees on their websites and in their offices.
But Darlington CAB is concerned this will have little impact.
The charity says it does not call for a fees ban in England ‘lightly’, but said alternative measures have not worked.
It adds that if charges are to be made, they should fall on landlords as they are in a better position to shop around and pick the best agency.
A fees ban was introduced in Scotland in 2012 and there is no clear evidence to suggest it has led to an increase in rental prices, the report adds.
Darlington CAB is running a Settled and safe: a renter’s right campaign, calling for better protections for private renters and anybody needing advice can visit the office at Bennett House on Horsemarket.
Source – Northern Echo, 06 Apr 2015
Tenants of private landlords should be given new rights to stay in their home as long as they please as well as guarantees that their rent will not increase above inflation, a think tank has argued.
Civitas said that a new regulatory regime is needed in the private rental sector to prevent landlords exploiting the shortage of homes to choose from at the expense of both tenants and taxpayers.
The growing private rented sector is expected to account for more than one third of the UK’s housing stock by 2032 and, at present, two-fifths (40 per cent) of private tenants’ incomes are typically taken up by their rent.
An increasing lack of affordability in the sector is being reflected in an increasing housing benefit bill for taxpayers, the report said.
The number of private renters needing housing benefit to meet their costs has more than doubled in the past decade, from 722,000 in 2003/4 to 1.7 million in 2013/14. This figure is forecast to reach 1.85 million in 2018/19, according to the Future of Private Renting report.
The document also said that the amount of housing benefit rent subsidies claimed in the private rented sector has more than doubled in real terms over the last 10 years, from £3.9bn in 2003/4 to £9.5bn in 2013/14, and is set to top £10bn in 2018/19.
The report said that while these sums are vital for growing numbers of low-income households with little choice but to rent privately, they are also creating a “vicious circle” by helping to prop up the rent inflation that they are meant to alleviate.
In areas with very high numbers of claimants, this could give landlords the opportunity to set their rents at artificially high levels, in line with the local housing allowance, the report said.
The report argued that the private sector should be required to offer indefinite tenancies “as the norm”. And once an initial rent has been agreed, index-linked ceilings on rent rises would give renters the security they need, it argued.
Daniel Bentley, author of the report, said:
“As private renting grows it is important to ensure that it offers a fair deal to those who have little choice but to rely on it.
“This vicious circle will only worsen as the private rented sector comes to represent an ever-larger proportion of the housing market and more and more tenants have to fall back on housing benefit.”
Civitas said that exceptions to rent ceilings could be made in cases where a property has genuinely been improved.
Landlords who buy new-build homes would also be exempted from the regulatory regime, but they would be encouraged to enter similar voluntary agreements.
The report said that at present, the vast majority of landlords invest in existing homes rather than new-build, with this added competition for homes helping to push up prices and crowd out first-time buyers.
Mr Bentley said new regulations would not necessarily spell an exodus of private landlords, “many of whom have invested to capitalise on rising house prices and are influenced in their investment decisions by a much broader range of factors”.
He said: “Future landlord investment must be nudged towards new-build rather than being encouraged to buy up existing owner-occupied homes.”
Source – Northern Echo, 02 Jan 2015
Almost a MILLION working parents are being forced to skip meals so that they can afford to pay the rent or mortgage, shocking new figures reveal.
A survey by YouGov, on behalf of the housing charity Shelter, has revealed that more than one in ten working families are going hungry to pay housing costs, while over a third admit they have cut back on buying food.
36.7% said they had cut back on how much they spend on food and 12.9% had put off buying shoes for their children. 9.7% said they had delayed purchasing school uniforms.
Government figures show that households spend, on average, 28% of their total income on housing costs. This rises to 40% in the private rental sector.
Shelter highlights the story of Katherine and her husband who both have full-time jobs but still struggle to pay their mortgage. “My husband and I don’t have breakfast because we can’t afford it, and we miss evening meals two or three times a month to help with the mortgage”, Katherine said.
She added: “We’ve really had to cut back on the basics, and I even had to send our daughter to school in an old uniform that I knew was too small; it made me feel horrible. We are already at breaking point, so I honestly don’t know what we’d do if our financial situation got worse; it really frightens me.”
Campbell Robb, chief executive of Shelter, said:
“No parent should be forced to choose between putting food on the table and paying for the roof over their children’s heads. These shocking figures show that millions of us are having to make these kind of agonising choices every day.
“Sky-high housing costs and cuts to support are leaving many families trapped on a financial knife-edge.”
Shadow Work and Pensions Secretary Rachel Reeves said: “This report provides shocking new evidence of how the Tories’ cost of living crisis is hitting hard-working families.
“While David Cameron says the economy is fixed, people who put in the hours to provide for their children are finding it harder and harder to make ends meet.”
The number of calls Shelter receives related to rent arrears has more than doubled in the last three years, and the majority of people regarded as living in poverty in the UK are in work.
Citizens Advice Chief Executive Gillian Guy said:
“Housing costs have left some families standing on a financial cliff edge. Working households that have already cut back on spending to get by could find themselves in the red if interest rates go up.
“Citizens Advice research shows 3 in 5 households are worried about the impact of rising bills this year, with over half forced to cut spending to balance the books.
“The competing pressures of sky-high childcare bills, rising energy costs and wages which are consistently below inflation, mean many people are struggling to pay for the roof over their head.
“Citizens Advice dealt with nearly 87,000 social housing rent arrears problems last year, up 10 per cent from 2012.
“It is welcome news that more people are in work, putting more households in a position to get on top of their bills. However, with record numbers of people becoming self-employed and increased numbers of jobs with uncertain hours, families face increasing instability in their income.
“An interest rate rise would put some in a more precarious position, so any rise needs to be slow and steady in order for families to manage the extra cost.”
According to the latest figures, there has been a 19% rise in cases of malnutrition in the UK over the past twelve months. Food prices have risen by 12% in seven years, while average wages have only increased by 7.6% over the same period.
Tory Housing Minister Brandon Lewis said: “Contrary to Shelter’s claims, repossessions are actually at their lowest since 2007 and down almost a third since last year.
“Our efforts to tackle the record deficit we inherited have helped keep interest rates at a record low, meaning home ownership is at its most affordable since 2007 while private rent levels are falling in real terms.”
Source – Welfare News Service, 28 Aug 2014